Investment vehicles come in a variety of forms, each with their own benefits and risks. Structured products are one such vehicle.
These products can offer a compelling return, but at the cost of increased risk and complexity. If you lost money on a structured product investment, you may be able to file a claim to recover losses with the help of an investment lawyer.
What Is a Structured Product?
In short, a structured product is a type of security derived from or based on one or more other securities. The defining feature of a structured product, however, is that its return is based on the performance of the underlying asset.
Structured products offer a great deal of customization that allows brokers to tailor the risk profile to each individual investor.
At the same time, however, they are complicated securities with a level of risk that make them inappropriate for many investors.
This complexity makes it more important than ever to make sure you have the best investment lawyer if you lose money on one of these products.
Tip #1: Make Sure They Are Familiar with Structured Product Investments
As explained above, structured product investments are fairly complex. Your investment lawyer needs to understand that complexity to properly represent you.
Even if most investment lawyers are generally familiar with different investment products, a structured product investment lawyer will have additional experience working on cases involving these securities.
Tip #2: Make Sure They Understand the Specific Risks of Structured Product Investments
As an investor, you’ve no doubt been told many times about the risks involved with particular investments. Your investment lawyer should have the same understanding of those risks.
Not only will this allow the lawyer to better understand your particular situation, it also means they will be more familiar with the ways in which a broker may cause you to lose money.
For example, making sure your investments are suitable for you is a large part of a broker’s responsibility. Considerations as to the suitability of a structured product generally include:
- The volatility of the underlying asset;
- Tax implications based on structured products being considered “contingent payment debt instruments” by the IRS;
- Limits or caps on the product’s pay-outs;
- Accurately assessing the price of the product;
- Lack of an established trading market for structured products; and
- Loss of principal.
Because structured products are so customizable, the specific risks associated with a specific structured product investment may vary.
Tip #3: Ask About Their Experience with FINRA Arbitration and Mediation
Many brokerage firms require investors to agree to arbitration when they open a brokerage account. While similar to court proceedings, arbitration is somewhat different and requires its own set of skills.
At our firm, for example, Robert Wayne Pearce has handled arbitration and mediation before many regulatory authorities, including the Securities and Exchange Commission.
In summary, the best investment lawyers will be those with experience in the specific types of proceedings relevant to your case.
Tip #4: Ask Them About Their Familiarity with FINRA Rules and Broker Responsibilities
The Financial Industry Regulatory Authority (FINRA), administers the set of rules that bind brokers and protect investors. Understanding these rules is just as important for investment lawyers as for brokers.
Only with a deep understanding of the FINRA rules can a lawyer provide the most thorough representation to protect your rights.
For example, FINRA rules prohibit brokers from “selling away,” a term for selling securities not offered by their brokerage firm. Unfortunately, brokers sometimes offer unapproved securities to their clients. With structured products, the risk can be especially high.
Additionally, keep in mind that not all broker violations are obvious. Every investor’s situation is slightly different, and the way in which a broker might harm an investor is highly dependent on the facts of each case.
Accordingly, you can’t go wrong by having a lawyer with experience who has handled structured investment loss claims before.
Tip #4: Assess Whether You Get Along with Them
An often-overlooked part of hiring legal counsel is whether you actually like your lawyer. While there’s nothing wrong with hiring an attorney based on their pedigree, it’s important not to forget that your attorney should also be someone you can work with.
As with any other professional service, you shouldn’t have to put up with an attorney you dislike, especially if your case will last a long time.
When you’re looking for an investment lawyer, figure out what kind of lawyer you’d like: do you prefer someone who doesn’t bother you unless there’s a major development, or would you rather be kept in the loop with more frequent updates? Do you value a friendly “bedside manner,” or are you ok with stricter professionalism?
Tip #5: Ask Them About Previous Experience Handling Similar Cases
Structured investment product claims may involve unique or complex issues. An attorney with previous experience handling such claims will be much better equipped to help you recover losses if possible.
Tip #6: Find Out Their Track Record of Obtaining Settlements
Investment lawyers typically include information about their past settlement awards directly on their website. If they don’t, it’s something you can ask about during your initial consultation.
The best structured product investment lawyer will be one with a proven track record of winning cases for clients.
Tip #7: Confirm Their Reputation Within the Legal Community
As members of a profession with a high ethical standard, a lawyer’s reputation is hugely important. Whatever the size of the firm, it can be useful to vet their reputation like you would with another personal service.
State and local bar associations and personal recommendations are a good way to evaluate any attorney. You can also check resources like the Martindale-Hubbell peer rating program, which ranks attorneys based on peer ratings and client reviews.
Ready to Hire an Investment Lawyer?
The Law Offices of Robert Wayne Pearce, P.A. is a Martindale-Hubbell AV Preeminent rated firm with more than 40 years of experience representing investors and brokers.
If you lost money through a structured product investment, our investment lawyers may be able to help you recover losses. Contact us today online or by phone at 800-732-2889 for a free consultation.