Over the last couple of years as Apple’s stock price soared to $700 plus, Wall Street seized upon Apple’s success as an opportunity to create a new structured product to sell to the ever trusting investing public. These hybrid creations, which look sort of like bonds but are not, called Equity Linked Structured Products, were heavily sold. Over $1.5 billion was invested in these products (there were 500 or so varieties marketed) whose value is linked to the performance of Apple Stock.
With the price of Apple having fallen dramatically to less than $450, investors are finding out that these products are nothing like bonds. Investors were sold the products in most cases by an adviser who used the success of Apple’s stock to sell the new product. Under the terms of many of these investments, now that the stock has fallen, a conversion provision has been triggered , and the “bond like” investment has been converted to shares of the recently deflated Apple stock. Investors no longer own a bond like investment. They now own shares of Apple, a result they may not have anticipated when making the investment.
If you believe your purchase of an Apple Equity Linked Structured Product was based upon misrepresentations or inadequate disclosure of the nature of the investment, you may be able to recover all or a part of your losses through FINRA arbitration.
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