At The Law Offices of Robert Wayne Pearce, P.A., we specialize in representing investors who have suffered losses due to steepener structured products. With over 40 years of experience, our team of highly skilled attorneys understands the complexities of these sophisticated financial instruments and the legal challenges they present.
Steepener structured products, including notes and CDs, are designed to pay varying interest rates based on the steepness or flatness of the yield curve. However, these products can lead to significant investment losses when market conditions change, as seen in the yield curve flattening of 2018 and inversion in 2019. Many investors have experienced rapid declines in value and reduced or eliminated interest payments as a result.
Preliminary Reading:
We offer comprehensive legal services for investors who have been affected by:
- Misrepresentation of the risks associated with steepener structured products
- Failure to disclose the potential for interest rate fluctuations and market volatility
- Unsuitable recommendations for steepener investments
- Over-concentration of portfolios in yield curve-dependent products
What Are Steepner Structured Products?
Steepener structured products are complex financial instruments that derive their value from the shape of the yield curve. These products, typically issued as notes or CDs, offer variable interest rates based on the difference between long-term and short-term interest rates. For example, a steepener might pay interest equal to a multiple of the difference between the 30-year and 2-year Treasury rates, minus a spread.
Steepeners often have long maturities, sometimes up to 20 years, and are generally illiquid as they don’t trade on public exchanges. They may offer attractive initial “teaser” rates for the first year or two, followed by uncertain future payments. For instance, a steepener might pay 5% for the first year, but subsequent payments could drop significantly or cease entirely if the yield curve flattens.
The risks of steepeners became apparent in 2018 when the yield curve flattened, causing many of these products to rapidly decline in value. The situation worsened in 2019 when the yield curve inverted, leading to further losses. During these periods, many investors saw their interest payments reduced dramatically or eliminated altogether.
While often marketed as safe, high-quality fixed-income investments, steepeners carry significant risks. These include potential loss of principal, reduced or eliminated interest payments, and difficulty in valuing or selling the product before maturity. The complexity of steepeners makes them challenging for many retail investors to fully understand.
For example, some brokers have faced legal action for misrepresenting steepeners as “bonds” or failing to adequately disclose their risks. In one case, a family filed a FINRA arbitration claim seeking over $1 million in damages due to unsuitable recommendations in these products.
Given their complexity and potential for misrepresentation, proper disclosure and suitability assessment are crucial when recommending steepeners to retail investors. Financial advisors must ensure clients understand the product’s structure, risks, and potential outcomes under various market conditions.
How We Can Help If You’ve Suffered Losses Due to Steepener Structured Notes
Our team is well-versed in FINRA arbitration and mediation proceedings, and we pursue claims for fraud, misrepresentation, breach of fiduciary duty, and failure to supervise. We work tirelessly to secure the best possible outcome for our clients, operating on a contingency fee basis to ensure that justice is accessible to all.
If you’ve experienced losses due to steepener structured products or other complex derivatives, don’t hesitate to reach out. Contact The Law Offices of Robert Wayne Pearce, P.A. for a free initial consultation and let our experienced securities law attorneys fight for your rights and recover your structured notes investment losses.
We are investigating and claims against brokerage firms including Centaurus Financial, Inc., J.P. Turner & Company, LLC, Aegis Capital Corp., Wells Fargo Advisors, and other brokerage firms for structured products investment losses. Please call us if you purchased steepeners through Ricky Mantei (CRD# 1098981), Cindy Chiellini (CRD# 1015592), Katherine Nishnic (CRD# 2499553), Dana Matthew Hawkins (CRD# 5731136), Alan Applebaum (CRD# 500336) or Joseph Andreoli (CRD#1718688).
Contact a Steepener Investment Fraud Attorney
We have been retained by many investors to file FINRA arbitration claims against brokerage firms to recover their losses. Our firm has been very successful in making recoveries for our clients throughout the United States for investment fraud and has recovered over $175 million for investors.
Was it just the market or were you mislead to invest in unsuitable steepener investments? Call Attorney Pearce at 1-800-SEC-ATTY (732-2889) with any questions you may have about how you may recover your steepener investment losses.
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