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.