Colling, Gilbert, Wright & Carter Securites Fraud
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Monday, August 16, 2010
Forbes Magazine: The Truth About Equity-Indexed Annuities
Forbes magazine columnist Mel Lindauer has been writing a series of columns about annuity investments. His most recent column, appearing August 13, 2010, takes equity-indexed annuities to task.
Mr. Lindauer describes the products as very complex annuity contracts sold with promises of increased value when the corresponding index goes up but with no chance of loss when the index goes down. He says this is misleading because in fact, the investor can lose money when the corresponding index goes down.
He says "this and similar spiels were and are likely being heard by many thousands of investors who were spooked by the recent market declines. They gladly accepted invitations from insurance salespeople to those infamous free chicken dinners where they tell you that 'you can leave your checkbook at home because nothings being sold.' "
Mr. Lindauer goes on to debunk the claim the products are not very complex and easy to understand when in fact, they are one of the most complex investment vehicles available, often not understood my the sales person let alone the investor.
Lastly, although the products are sold with promises of market-like performance on the upside, the reality is the upside is limited and the guarantee of no principal loss is faulty. The agents often leave out the bad news regarding these products like the high expenses and insurance costs associated with them as well as the surrender penalties associated with a early withdrawal. Obviously, this is not a product for someone needing liquidity like a retiree facing unforeseen medical expenses or the need for nursing services.
The regulators, including the SEC and FINRA seem to be on to the insurance industries act and have published and proposals for federal investor protection involving these products.
The bottom line is the products are probably not suitable for most retirees and should be avoided. The full text of the Fortune article is linked here.
If you have purchased an equity-indexed annuity and believe the product was not adequately explained or was misrepresented, please contact our office to discuss your option for rescinding the transaction. Thank you.
Mr. Lindauer describes the products as very complex annuity contracts sold with promises of increased value when the corresponding index goes up but with no chance of loss when the index goes down. He says this is misleading because in fact, the investor can lose money when the corresponding index goes down.
He says "this and similar spiels were and are likely being heard by many thousands of investors who were spooked by the recent market declines. They gladly accepted invitations from insurance salespeople to those infamous free chicken dinners where they tell you that 'you can leave your checkbook at home because nothings being sold.' "
Mr. Lindauer goes on to debunk the claim the products are not very complex and easy to understand when in fact, they are one of the most complex investment vehicles available, often not understood my the sales person let alone the investor.
Lastly, although the products are sold with promises of market-like performance on the upside, the reality is the upside is limited and the guarantee of no principal loss is faulty. The agents often leave out the bad news regarding these products like the high expenses and insurance costs associated with them as well as the surrender penalties associated with a early withdrawal. Obviously, this is not a product for someone needing liquidity like a retiree facing unforeseen medical expenses or the need for nursing services.
The regulators, including the SEC and FINRA seem to be on to the insurance industries act and have published and proposals for federal investor protection involving these products.
The bottom line is the products are probably not suitable for most retirees and should be avoided. The full text of the Fortune article is linked here.
If you have purchased an equity-indexed annuity and believe the product was not adequately explained or was misrepresented, please contact our office to discuss your option for rescinding the transaction. Thank you.
posted by
William B. Young Jr. Esq.
at
6:29 AM
Thursday, August 5, 2010
UBS Hit with $81 Million Damage Award
According to an award issued by a Financial Industry Regulatory Authority (FINRA) arbitration panel, brokerage giant UBS must pay cell phone maker Kajeet Inc. nearly $81 million in damages over student-loan auction rate securities it sold to the company.
The award comes on the heals of hundred of arbitration claims filed on behalf of investors alleging misrepresentation in the sale of UBS proprietary structured notes labeled as Principal Protected Notes (PPN), Partially Principal Protected Notes (PPPN) or Return Optimization Notes (RON). Although the notes were marketed as guaranteeing some level of protection for the investors, many were backed by the credit of now defunct Lehman Brothers Holdings. As unsecured debt holders, the investors are now forced to file arbitration claims and await bankruptcy proceeding distributions to recoup their losses.
If you purchased a UBS proprietary structured note, please contact our offices to discuss your options for recovery. Thank you.
The award comes on the heals of hundred of arbitration claims filed on behalf of investors alleging misrepresentation in the sale of UBS proprietary structured notes labeled as Principal Protected Notes (PPN), Partially Principal Protected Notes (PPPN) or Return Optimization Notes (RON). Although the notes were marketed as guaranteeing some level of protection for the investors, many were backed by the credit of now defunct Lehman Brothers Holdings. As unsecured debt holders, the investors are now forced to file arbitration claims and await bankruptcy proceeding distributions to recoup their losses.
If you purchased a UBS proprietary structured note, please contact our offices to discuss your options for recovery. Thank you.
Labels: broker misconduct
posted by
William B. Young Jr. Esq.
at
9:19 AM
TD Ameritrade Faces Civil Fraud Allegations Over Reserve YieldPlus Fund Losses
Yesterday, the Pennsylvania Securities Commission Filed a civil complaint against TD Ameritrade alleging fraud in the marketing and sale of the firm's Reserve Yield Plus Fund.
The complaint alleges the firm and fund managers marketed the firm to customers upon the representation it was a money-market fund when in reality, it was "cash enhanced" fund that is riskier and contained assets not normally found in a standard money market fund. The complaint also alleges the firm and its representatives continued to offer the fund to clients after firm management indicated it could go below the $1 price/asset value threshold commonly associated with money market accounts.
At its high point, the TD Ameritrade Reserve Yield Plus fund held approximately $1.2 billion in assets. However, the fund was frozen shortly after another TD Ameritrade Reserve fund (the Reserve Primary Fund) told investors it they were unable to redeem their money. Investors holding these funds experience significant losses as a result.
The attorney at Colling Gilbert Wright & Carter are currently investigating and filing arbitration claims on behalf of investors who lost money as a result of investments in the Reserve Yield Plus Fund or the Reserve Primary Fund. If you have experienced losses in either fund, please contact our offices for a free case evaluation. Thank you.
The complaint alleges the firm and fund managers marketed the firm to customers upon the representation it was a money-market fund when in reality, it was "cash enhanced" fund that is riskier and contained assets not normally found in a standard money market fund. The complaint also alleges the firm and its representatives continued to offer the fund to clients after firm management indicated it could go below the $1 price/asset value threshold commonly associated with money market accounts.
At its high point, the TD Ameritrade Reserve Yield Plus fund held approximately $1.2 billion in assets. However, the fund was frozen shortly after another TD Ameritrade Reserve fund (the Reserve Primary Fund) told investors it they were unable to redeem their money. Investors holding these funds experience significant losses as a result.
The attorney at Colling Gilbert Wright & Carter are currently investigating and filing arbitration claims on behalf of investors who lost money as a result of investments in the Reserve Yield Plus Fund or the Reserve Primary Fund. If you have experienced losses in either fund, please contact our offices for a free case evaluation. Thank you.
Labels: broker misconduct
posted by
William B. Young Jr. Esq.
at
8:57 AM
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