Reverse convertibles, are often called “trigger notes,” “phoenixes,” or “auto-callables.” These structured products promised high yields of 6% to 12% or more, but trigger a conversion to Apple common stock if the price falls, usually on average 15% to 20%. With Apple down more than 25% from its high of last fall in 2012, many of these instruments may already converted and have handed their investors severe losses.
The price of Apple has dropped from over $700 to below $500 per share. Brokers sold a lot of structured notes based on the price when Apple was north of $700.
Many brokers represented to their clients that the structured notes were “safe and guaranteed,” and presented it as a way to benefit from the Apple’s rise without the risk. Unfortunately, the price of Apple plummeted, the notes converted and many conservative investors looking for a safe yield ended up with a lot of falling shares of Apple’s common stock.
$241 million of structured notes tied to Apple Inc. face losses after a 27 percent drop in the stock of the world’s most valuable company eroded built-in cushions that protect investors. Banks issued 76 US notes linked to Apple stock during the seven weeks starting August 20th. when the company was valued at $650 a share or more. In total, banks issued $1.66 billion of such notes, making Apple the most popular underlying company in such high commission structured products.
If you were a conservative investor who was seeking yield and ended up with a bunch of falling Apple common stock after buying Apple-linked reverse convertibles in 2012, Soreide Law Group would like to speak with you about your potential claim. Call 888-760-6552 or visit https://www.securitieslawyer.com.