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Investor Claims Involving "100 Percent Principal Protected Notes" Soar

David P. Meyer, Esq.

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.

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