Securities Fraud Lawyer Blog
The Law Office of David Liebrader has opened an investigation into sales by Cornerstone Wealth Management (Las Vegas) of structured notes, including structured notes sold at “free seminars.”
At these seminars, which were given at restaurants in Las Vegas to seniors looking for safety of principal and retirement income, Cornerstone Wealth Management and their sales team, many of whom are licensed through Independent Financial Group pitched structured notes as being equivalent to bonds and certificates of deposit, and ideal for seniors looking to avoid stock market risk.
FINRA, which regulates the brokerage industry, has issued a notice to investors regarding the hidden risks of investing in structured notes, which are essentially derivatives, and which investor Warren Buffet famously referred to as “weapons of financial destruction.” Among the risks identified by FINRA are the lack of liquidity, and that an investor may lose some or all of their principal on the happening of an ill-defined (and supposedly unlikely) event in the future. The Securities and Exchange Commission also published an investor alert bulletin on structured notes in 2015 warning investors of the risks of investing in these complex products.
The facts giving rise to this investigation into Cornerstone Wealth Management (Las Vegas) and their sales team involve a structured note whose return was tied to the share price performance of Disney and PayPal.
These structured notes were issued by the Canadian Imperial Bank of Commerce. In addition to the market risk from the movement of Disney and PayPal’s stock price, investors also bear the risk that CIBC will be unable to redeem the notes at maturity. And, as is the case with almost all derivatives sold to retail “mom and pop” investors, the Issuer on the other side of the trade usually has a great deal more information than the investor, which is why they are on the other side.
Registered representatives with Independent Financial Group and Cornerstone Wealth Management Las Vegas are required to act in the best interests of their customers when making recommendations to buy securities.
If you were sold structured notes based on the representations that these were safe, bond like investments that provided guaranteed income to maturity, only to discover that due to an underlying event, the income has been compromised, and there is no way to sell the investment, you may have a claim worth pursuing.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 30 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time, we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $50,000,000.
When investors contact our firm, they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as structured notes or private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies such as attorney’s fees and interest, if they are successful on the claim.
If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable structured note investments to you, call us today for a free, confidential consultation at (702) 380-3131.