In the last few years, individual investors have lost billions of dollars
collectively due to the marketing of complex, supposedly safe, securities
by brokerage firms and securities advisors.
Now, investors are bringing new cases against firms and advisors involving
another complex security marketed as secure: "100 percent principal
protected absolute return barrier notes."
According to a recent New York Times article, brokerage firms marketed these Lehman Brothers-issued, zero-coupon notes
to conservative investors whose typical investment strategies involved
little to no risk. Upon Lehman's bankruptcy, many of those investors
found themselves holding principal-protected notes that had lost all or
almost all of their value.
Current arbitration cases claim that firms such as UBS marketed the Lehman
notes without sufficiently informing investors of the risks associated
with the notes, and that due to the complexity of the securities themselves,
they should not have been marketed to individual investors at all, especially
conservative investors who typically invested only in C.D.s.