CONTACT US | REPORT A FRAUD

FREQUENTLY ASKED QUESTIONS



Q: What is a reverse convertible note?

A: Reverse convertible notes are short-term bonds that are tied to the performance of an underlying stock. Reverse convertible notes typically offer high yields and promise a full return of principal, provided the value of the underlying stock doesn’t fall below a set “knock-in” level. They are also known as "reverse converts," "revcons," "reverse convertible bonds," and "reverse convertible securities."

Q: How did reverse convertible notes originate?

A: Reverse convertible notes originated in Europe and were introduced to the U.S. market about 5 years ago.

Q: What type of stocks are tied to reverse convertible notes?

A: Reverse convertible notes have been linked to a wide variety of stocks, including well-known companies like Apple, Yahoo, and Johnson & Johnson, and financial institutions like Bear Stearns and Lehman Brothers.

Q: Have regulators commented on the sale of reverse convertible notes?

A: In 2005, the National Association of Securities Dealers issued a guidance notice to their members concerning the sale of structured products, such as reverse convertible notes. The notice warned brokerage firms not to “portray structured products as ‘conservative’ or a source of ‘predictable current income’ unless such statements are accurate, fair and balanced.” The notice also suggested that brokerage firms limit the sale of these products to investors approved for option trading.

Q: Has Girard Gibbs filed a reverse convertible notes lawsuit?

A: Girard Gibbs has not filed a reverse convertible notes lawsuit at this time. We are currently in the process of investigating complaints from investors who purchased reverse convertible notes. To learn more about our ongoing investigation, contact us at (866) 981-4800 or fill out the form on the right.

Q: How much will Girard Gibbs charge me?

A: Nothing. Our attorneys do not charge our clients for bringing a lawsuit.

HOME > SECURITIES > REVERSE CONVERTIBLE NOTES

Legal Investigation into "Reverse Convertible" Notes

Did you invest in reverse convertible notes?

Girard Gibbs is currently investigating consumers' complaints concerning short-term notes known as "reverse convertibles," "reverse converts," "knock-in notes," or "revcons."

Reverse convertibles are short-term, unsecured bonds that are issued by banks and financial institutions such as Morgan Stanley, JPMorgan, Citigroup, Royal Bank of Canada, ABN Amro Holding NV and Barclays PLC among others. The notes are typically linked to the performance of a well-known stock and often pay double-digit yields. Once the notes mature, investors should get their full principal investment back. However, if the value of the underlying stock falls to a certain point, sometimes referred to as the "knock-in" or "barrier" level, investors get shares of the devalued stock in lieu of their full principal investment.

The Investigation

Recent media reports indicate that some brokerage firms may have been charging fees on reverse convertible notes that equal or exceed the securities' highest possible yield. Undisclosed costs, such as a profit for the issuer, are generally included in the notes' sale price, making it very difficult for the typical individual retail investor to determine whether the reverse convertible represents a good deal. The Financial Industry Regulatory Authority, the industry- funded brokerage regulator, has recently made sales of reverse convertibles a priority for its examination and enforcement divisions.

If you purchased reverse convertible notes and wish to learn more about our investigation or discuss your rights, please fill out the form on the right or call us toll free at (866) 981-4800.

Why Girard Gibbs LLP?

Girard Gibbs is a national litigation firm specializing in securities litigation. The firm represents individual and institutional investors in class and non-class actions and individual arbitration proceedings. The firm’s senior partner, Daniel Girard, has been chosen as a Superlawyer by Law & Politics, recognizing him as among the top 5-percent of attorneys practicing in Northern California.





Would you like more information about our reverse convertible notes investigation?

Please fill out the form below, or call toll-free (866) 981-4800 for more information.

First Name:
Last Name:
Phone:
Email:
State/Province:
Message:

I would like to receive updates concerning this investigation.

Your use of this web site, or sending of email to Girard Gibbs LLP, does not, by itself, create an attorney-client relationship between you and Girard Gibbs LLP.

Privacy Policy: Girard Gibbs maintains the privacy of your message. We do not transfer your personal information, including your email address, to any third party. Information entered in the form will be used solely for informational purposes to assist in our case investigations.

(415) 981-4800 | mail@girardgibbs.com

© Girard Gibbs LLP 2010 | Attorney Advertising
Prior results do not guarantee a similar outcome. WEBSITE DESIGN: DAVID MIHM