Zamansky LLC is currently investigating claims on behalf of investors in several securities tied to Lehman Brothers. These investors bought Lehman Brothers’ “principal protected notes,” also known as “structured notes” as well as the firm’s preferred and common stock. Many of the investors we are hearing from were inappropriately placed into these securities by their brokers and are seeking to recoup their losses. It is likely that claims like these with regard to bank stocks, will be the next “Dot.com” and thousands of investors will file for arbitration.
Lehman Brothers Structured Notes
Lehman structured notes are financial instruments that were pitched to investors looking for safe, conservative places to invest their money. Brokerages pitched these ostensibly risk free products to their most risk-adverse clients, namely retirees or near retirement investors. In many cases, they were sold just months or weeks before the firm declared bankruptcy.
Many of these investors can seek recovery for their lost investments.
Generally speaking, Lehman Brothers structured notes consist of “derivatives,” a complex security that is masked with fixed income-like qualities. Lehman Brothers structured notes were supposed to provide an investor with the safety of a bond and the rate of return of an equity investment. However many investors were unaware that these securities were tied to other risky assets. And what is now known is that Lehman Brothers and other brokerages were using the revenue generated from these obscure products to make up for underperformance in other areas of their business related to the subprime mortgage crisis. Indeed, major brokerages such as UBS, Wachovia, Merrill Lynch, Citigroup, and many others sold Lehman structured notes for the same reason.
Another major selling point was that Lehman Brothers guaranteed the structured notes with “100 percent principal protection” and claimed buyers had “uncapped appreciation potential” in a brochure sent to investors in July. The brochure even made the audacious assertion that the buyer would at the very least get back their 1,000 per note investment in three years. Since Lehman Brothers is now out of business, the guarantee is basically worthless.
If your brokerage firm pitched you Lehman Brothers structured notes, contactZamansky LLC.
Lehman Brothers Preferred and Common Stock
We would also like to hear from investors who were sold Lehman Brothers preferred or common stock. Depending on when and how brokers pitched the preferred or common stock, losses could be recovered through FINRA arbitration.
This is because brokers have a fiduciary responsibility only to recommend investments that are in line with their client’s risk tolerance. It seems brokers who pushed their clients into preferred or common stock of Lehman Brothers in the last 16 months may have done so for their own personal gains or were simply incompetent. In either case, investors are assured they can file for protection through FINRA arbitration. In addition, those investors that bought preferred shares through the Lehman preferred stock offering in March, 2008 could potentially file claims.
Investors who were over-weighted in Lehman Brothers preferred and common stock, as well as investments tied to other financial institutions, may also seek recovery. Brokers should have diversified their clients early on in the credit crisis.
Lehman Brothers’ Improper Disclosure Allegations
It is alleged that Lehman Brothers failed to make proper disclosures in its preferred stock offering’s prospectuses relating to the problems the firm faced as a result of the sub-prime crisis. Financial experts have alleged that the problems it faced back in March 2008 ultimately led to its bankruptcy filing on September 15, 2008. Investors should have been alerted of these grave troubles.
We have been contacted by several investors who have incurred losses relating to Lehman securities. We offer free consultations and ensure confidentiality. If you suffered losses stemming from Lehman Brothers’, contact Zamansky LLC.