TAG | Tivo loss
Soreide Law Group, PLLC, is currently investigating the sale of TiVo reverse convertible notes (RCN). The Wall Street Journal published an article in March, 2011, titled Complex Bond Faces Regulators’ Scrutiny; ‘Reverse Convertible Notes’ Can Tumble Along with Stock. In the Wall Street Journal article it states that, “Securities regulators have broadened their probes into whether Wall Street sold a complex type of bond without fully disclosing the drawbacks to individual investors.” According to the Wall Street Journal, the SEC is investigating whether Wall Street firms that developed the bonds allegedly failed to properly disclose the risks and fees to investors before they bought the notes. The SEC is also examining the disclosure of potential conflicts of interest, such as a bank selling a note linked to the stock of a company it is advising. The Wall Street Journal reported that the SEC is investigating reverse convertible notes issued last year by J.P. Morgan Chase & Co. and Barclays PLC linked to TiVo, Inc.
The article also states that the total return on the TiVo notes was less than $600 per $1,000 invested. TiVo shares dropped after the company lost a court ruling in May, 2010, in a patent dispute. The prospectuses for the RCNs contained disclosures on risk factors, but didn’t refer to the pending TiVo court ruling.
Reverse convertible notes or RCNs pay a fixed interest rate and guarantee the investor’s initial investment after a specified period, unless the linked stock falls below a certain point. If that should happen, the notes often pay back just a fraction of the original investment. RCNs typically have high commision fees and are considered by some money managers to be highly risky and even toxic assets.
Did you or a family member invest in TiVo Reverse Convertible Notes, or were you sold other risky RCNs by your broker or brokerage? If so, call Soreide Law Group, PLLC, for a free consultation on how to recover your losses. To speak with a Securities Arbitration Attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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