Enhanced Yield Reverse Exchangeable Securities with Contingent Downside Protection
Zamansky LLC has launched an investigation on behalf of investors who purchased Enhanced Yield Reverse Exchangeable Securities with Contingent Downside Protection (”Securities”). The Securities were underwritten by a Norwegian-based financial services group, Eksportfinans A.S.A., beginning in September 2007.
The Securities were marketed primarily to elderly investors on fixed incomes as a high-yield, safe, alternative to plain vanilla investment products such as Certificates on Deposit (CDOs), Treasuries, and other low risk/low yield products, but were in fact extremely risky Reverse Convertible Notes.
Elderly investors with fixed incomes tend to be risk adverse and rely on investment income and the protection of their principal for daily living expenses. Eksportfinans allegedly sold the securities to investors with the promise that their principal investment would be completely protected.
Confused by the complexity of the securities, elderly investors were allegedly misled into paying inflated prices for the Enhanced Yield Reverse Exchangeable Securities. Moreover, investors did not understand that “Contingent Downside Risk” meant that their principal was only protected if the price of the underlying security stayed above a set price. When the Securities matured, investors were left holding shares of stock that were considerably less than the principal they originally paid.
Zamansky LLC is investigating whether Eksportfinans inappropriately sold the Securities to investors and did not adequately explain the risks. If you purchased Enhanced Yield Reverse Exchangeable Securities with Contingent Downside Protection, please contact Zamansky LLC by email at email@example.com or by phone at (212)-742-1414 for a free and confidential consultation.