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Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 41-50 out of 55 results for "Reverse Convertibles".

SEC Sends Letter to Issuers of Structured Notes

(Apr 2012)

Recently the SEC sent out a letter to certain financial institutions regarding their offerings of structured notes. The letter was sent by Amy M. Starr, the Chief of the Office of Capital Markets Trends, Division of Corporation Finance. In the letter the SEC urges the structured note issuers to disclose key information with regard to the offerings, such as product pricing and use of issuing proceeds.

The SEC highlighted a number of potentially confusing aspects of structured notes and their...

SLCG Research: Reverse Convertibles and Stochastic Volatility

(Feb 2012)

We've talked a lot about structured products -- and reverse convertibles in particular -- on this blog. In this blog post we discuss reverse convertibles in more detail and present some results found in a new research paper my colleagues and I have just completed.

Reverse convertible notes -- or simply "reverse convertibles" -- are structured products whose payoff at maturity is dependent upon the return of an underlying asset or security during the tenor of the note. If the underlying asset...

FINRA Regulatory Notice: Complex Products

(Jan 2012)

FINRA recently released Regulatory Notice 12-03: Heightened Supervision of Complex Products, outlining their increased scrutiny of a wide variety of alternative investments including structured products, inverse or leveraged exchange traded funds, and asset-backed securities. Here at SLCG, we've done research on each of those subjects, and have a variety of ongoing projects that bear directly on the issues highlighted by the Notice.

The products identified include:

Asset-backed...

SEC Press Release: Structured Products

(Jul 2011)

SEC Staff Issues Summary Report of Sweep Examination of Structured Products Sold to Retail Investors

The Securities and Exchange Commission (SEC) issued a press release today announcing that it had

"issued a report identifying common weaknesses seen in sales of structured securities products and describing measures by broker-dealers to better protect retail investors from fraud and abusive sales practices."

The report is a result of studies in the structured products business of...

In the News: UBS & Morgan Stanley Subpoenaed over Reverse Convertibles

(Jul 2011)

UBS, Morgan Stanley Subpoenaed Over Reverse Convertibles

Bloomberg news reported today that the state of Georgia had sent subpoenas requesting for data and other information from UBS AG, Morgan Stanley and Ameriprise Financial Inc.. The state is investigating whether these brokerage firms violated the securities laws of Georgia in their sale of reverse convertibles to investors of Georgia.

Sales of reverse convertibles have grown, and investors who are being sold these structured...

SEC Press Release: Reverse Mergers

(Jun 2011)

SEC Issues Bulletin on Risks of Investing in Reverse Merger Companies

The Securities and Exchange Commission (SEC) announced in a press release today announcing that it had "issued an Investor Bulletin about investing in companies that enter U.S. markets through so-called 'reverse mergers'." The purpose of the Investor Bulletin, according to SEC's Office of Investor Education and Advocacy's, is to educate investors on the potential risks of investing in the stock of reverse merger...

SLCG Research: Modeling Autocallable Structured Products

(Mar 2011)

SLCG released today 'Modeling Autocallable Structured Products'.

A callable structured product is a note that is callable by the issuer. The note is linked to an underlying asset, or 'reference asset.' If the reference asset reaches the call price during the term of the note, the note is called and note holder receives a pre-specified return. If the reference asset never reaches the call price during the term of the note, the note is never called and the note holder simple receives the...

FINRA Investor Alert: Reverse Mortgages

(Nov 2010)

Reverse Mortgages: Avoiding a Reversal of Fortune

The Financial Industry Regulatory Authority (FINRA) issued an Investor Alert to help investors make informed decisions on whether or not to take out a reverse mortgage. A reverse mortgage is a loan that is secured by the equity of the borrower's home. A reverse mortgage converts the equity into cash and the loan is paid off when the borrower dies or moves out and sells his or her home.

Investors should beware of a few things. Firstly,...

FINRA Press Release: Reverse Convertibles

(Oct 2010)

FINRA Orders Ferris, Baker Watts to Pay Nearly $700,000 for Inappropriate Sales of Reverse Convertible Notes

The Financial Industry Regulatory Authority (FINRA) issued a press release today announcing that

it has fined the former Ferris, Baker Watts LLC, acquired by RBC Wealth Management, $500,000 for inadequate supervision of sales of reverse convertible notes to retail customers as well as unsuitable sales of reverse convertibles to 57 accounts held by elderly customers who were at...

In the News: SEC Reviewing Sales of Structured Products

(Sep 2010)

Bloomberg issued a news release today announcing that sales practices of banks and broker-dealers for structured products are being investigated by the Securities and Exchange Commission (SEC) for product overcharging and disclosure of conflicts of interest.

This is not a surprising new release: it is consistent with our findings in our paper on reverse convertibles, 'What TiVo and JP Morgan teach us about Reverse Convertibles.' In this paper, we find that brokerage firms consistently...

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