Taking Steps to Protect Yourself from Structured Product Fraud

Although the lure of structured products might be hard to resist, it’s worth taking the time to make sure you understand the investment and how it fits into your overall portfolio. If you’re hearing the siren call of a promising investment, here are a few steps you can take to protect yourself from structured product fraud:

  • Ask your broker or advisor to describe the worst-case scenario. All investments come with risks, and you shouldn’t be afraid to ask your advisor what happens if things go wrong. Ask your advisor to describe the worst-case scenario—and don’t forget to read the “fine print” on your own to verify what you’ve been told and learn more about the risks.
  • Find out about fees and commissions. Many structured products come with high up-front fees, so make sure you understand where your money is going. Additionally, if your broker gets a commission for selling the structured product, realize that he or she might be tempted to push it even though it’s unsuitable for you.
  • Take a look at your overall financial picture. How will this investment fit with your current portfolio and overall financial objectives? If the worst happens, can you tolerate the losses? Not every investment is right for every investor, and it’s important to make sure an investment is really suitable for you before investing.
  • Do your own research. As an investment fraud lawyer, I cannot emphasize this enough. Check with FINRA, the SEC, and your state regulators. Look into the background of the promoter, the investment, and associated companies, and pay special attention to any complaint and disciplinary history. Read all the materials you’ve been given, and do a quick Google search or two.

If you believe you have become the victim of structured product fraud, or if you’re unsure if your broker or advisor can be held liable for your investment losses, please reach out to an experienced investment fraud lawyer today.


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