- Bank of America Corp.
- Bank of America/Merrill Lynch
- Credit Suisse Group AG
- JPMorgan Chase
- Deutsche Bank
- Morgan Stanley
- Barclays Bank
As a result, investors who purchased these investments under the mistaken belief that they would receive their initial investment back at the end of the holding period are often surprised to learn the true risk of the investment when they open their account statements. Unfortunately, many investors have suffered massive losses in these investments as the price of commodities like oil and natural gas continued to decline in 2015.
On August 24, 2015, the Securities Exchange Commission (SEC) issued a Risk Alert that detailed its investigation into the sales-practices of various broker-dealers’ sales of structured securities products. The examinations revealed several significant deficiencies in the areas of suitability and supervision with respect to all of the examined firms’ sales of SSPs to retail investors, including but not limited to: 1) failure to maintain and/or enforce adequate controls relating to determining the suitability of SSP recommendations; and 2) failure to conduct both compliance and supervisory reviews of registered representatives’ determinations of customer suitability in the SSPs, as required by their internal controls. Consequently, many brokerage firms face liability for their lax supervision of the sale of oil and natural gas-linked SSPs to investors.
Under NASD Conduct Rule 2310 (now FINRA Rule 2111), financial advisors are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule) are careful review of the product and analysis of the customers’ unique financial situation. Additionally, brokerage firms are required to supervise the sale of all investments, including oil and natural gas-linked SSPs. Typically, a claim for unsuitable investments is brought as a form of a negligence claim with the theory: the financial advisor had a duty to recommend suitable investments; the financial advisor breached the duty with unsuitable investments; and the financial advisors unsuitable investments caused the investor damages.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered losses investing in oil and natural gas-linked SSPs, we may be able to help you recover your losses through a FINRA arbitration claim against the brokerage firm that recommended the investment. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.