Wall Street May Be Chaotic, but That Doesn’t Mean Your Investments Should Be Too
This past year, Wall Street has been more chaotic than it has been in recent memory, which is causing investors to worry about the future of their investments. While you may be concerned about what this market volatility means for your future, that doesn’t mean you should throw logic and reason out the window to start investing in potentially enticing, but incredibly risky options.
The Financial Industry Regulatory Authority (FINRA) issued a warning to investors about trading complex, speculative products that are intended to turn a profit on the volatility of the current market. FINRA reported that investors who called in to complain about these investments claim losses of six figures. In an interview with GM Today, FINRA’s Senior Vice President of Investor Education Gerri Walsh told the story of one person who called in and said that he lost everything after using all of his family’s assets to invest in a product that was based on inverse performance of futures on the Chicago Board Options Exchange Volatility Index (VIX).
“One caller we had heard from really lost everything,” Walsh said over the phone. “You’re taking a significant risk and you need to understand that. There’s always risk involved with these products.”
Walsh noted that some potential investors first heard about these types of products through financial news media and started using online brokerage accounts to invest on their own, but others were pushed to invest by their brokers. The increased interest in this product is fueled by the massive returns some investors saw over the past couple years, but these brokers have a responsibility to inform their clients of the potential risk of products, as well as carefully investigate any potential product before even bringing it up. These products are not suitable for the vast majority of investors, and brokers need to be sure to explain the significant risk if they even bring up this option in the first place.
If you lost money because you were pressured to invest in a risky option, you may be able to pursue a claim to recover losses. At Meyer Wilson, our investment fraud attorneys have spent their careers working with victims of fraud across the United States, and through our efforts have secured more than $350 million for our clients. Call us at (888) 390-6491 to speak with a member of our firm over the phone, or start out with a free case consultation by filling out our online form.