Legal Investigation into "Reverse Convertible" Notes
Have you suffered losses 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, 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.
Sales of reverse convertible notes rose rapidly in years leading up to the recent market downturn, nearly doubling from 2006 to 2007. But as stocks fell in 2008 and 2009, many investors were left with substantial losses on notes that they had believed were free of risk.
The Investigation
Recent media reports indicate that some brokerage firms may have misled their clients as to the risks associated with investing in reverse convertible notes. According to these reports, the notes were being marketed as safe and appropriate for risk-averse investors, when in fact, they subjected investors to significantly more risk than was disclosed.
If you believe that you may have been misled as to the risk of your reverse convertible notes and wish to learn more about our investigation, 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, consumer class actions and complex business litigation. Girard Gibbs' managing partner Daniel Girard was voted one of Northern California's Super Lawyers in 2007, 2008, and 2009 by Law & Politics, recognizing him as one of the top 5-percent of attorneys practicing in Northern California.
