Structured notes are marketed as safe income tools with limited risk. In practice, they are complex hybrid securities that combine a debt component with a derivative component, exposing investors to issuer credit risk, illiquidity, and market downturns. When a broker recommends these products without fully explaining the risks, investors can face losses far larger than they were led to expect.
At Haselkorn & Thibaut, P.A. — operating as Investment Fraud Lawyers — we have handled hundreds of cases involving structured products, autocallables, reverse convertibles, and principal-protected notes. Our firm has a 98% success rate in securities-related cases and has been involved in over $520 million of recovery actions. We understand how these products fail, what regulators require brokers to disclose, and how to build a FINRA arbitration claim that holds the right parties accountable.
If you lost money in structured notes recommended by a broker or financial advisor, call 1-888-885-7162 for a free consultation. Below is what you need to know about structured note losses, how to identify broker misconduct, and how a structured notes loss lawyer can help you recover your investment.
What are structured notes and why do investors lose money?
Structured notes are hybrid securities that pair a bond-like debt instrument with a derivative tied to an underlying asset. The underlying asset can be a stock index, a single equity, a commodity, a foreign currency, or an interest rate swap. The coupon payments and final principal repayment depend on the performance of that underlying asset.
What makes these products risky is their embedded complexity. Features such as autocallability, reverse convertibility, knock-in triggers, and capped maximum returns can dramatically alter the payout profile. Many investors receive these products from a trusted broker without understanding that:
- The issuer — not a government or deposit insurer — backs the principal, creating issuer credit risk.
- There is virtually no secondary market, so selling before maturity usually means a steep discount.
- Complex trigger conditions can eliminate promised coupon payments even when the market is flat.
- Brokers often receive higher commissions for selling structured products than traditional fixed-income instruments.
Major structured notes cases and enforcement actions
Regulators and arbitration panels have repeatedly found that brokers failed to explain structured note risks, overconcentrated client portfolios in these products, or recommended them to investors whose risk tolerance did not match the product profile. Here are four high-profile matters that show the scale of the problem:
| Case / Firm | Action | Dollar Impact | Year |
|---|---|---|---|
| Stifel Financial / Chuck Roberts | FINRA barred broker after $132.5 million arbitration award | $132.5M | 2025 |
| Stifel Nicolaus / Chuck Roberts | FINRA panel ordered firm to pay clients over $14M in damages | $14M+ | 2024 |
| Stifel Financial / Miami broker | Ordered to pay damages over structured note strategy | $2.4M | 2024 |
| Stifel Financial | Settlement over structured notes strategy | $850K | 2023 |
| Dharmesh Vora / Kalos Capital | Barred for unsuitable structured note recommendations in Arizona | Tens of millions | 2024 |
These cases share a common thread: brokers recommended structured notes to investors who did not understand the products, and the firms failed to supervise those recommendations adequately. In the Stifel matters, FINRA found that Chuck Roberts’ structured notes strategy caused massive client losses. In the Vora matter, the Arizona Corporation Commission barred the broker for recommending unsuitable structured notes to retirees. Our firm has represented investors in similar situations across all five office locations — Florida, Texas, North Carolina, Arizona, and New York.
Signs your broker may be liable for structured note losses
Not every loss in a structured note means the broker is at fault. But there are specific red flags that strongly suggest misconduct or a failure to disclose material risks. If one or more of the following applies to your situation, you should speak with a structured notes loss lawyer promptly:
- The product was recommended as a safe fixed-income alternative. If your broker described structured notes as comparable to bonds or CDs without explaining issuer credit risk, illiquidity, or embedded derivatives, that may constitute misrepresentation.
- Your portfolio was overconcentrated in structured products. FINRA Rule 2110 and Rule 2111 require suitable recommendations. A portfolio heavily weighted in autocallable reverse convertibles may violate concentration guidelines.
- The broker did not explain trigger conditions or capped returns. If you were not told that a single missed index trigger could eliminate an entire coupon payment, or that your upside was capped at 20% while the market rose 35%, the broker may have omitted material facts.
- The product was unsuitable for your age, income, or risk tolerance. Brokers have a duty to know their clients. Recommending complex derivatives to a conservative retiree may violate FINRA suitability standards.
- The issuer has faced regulatory action for similar products. Firms such as Citigroup-investor-losses/”>Citigroup, Morgan Stanley, Goldman Sachs, and Wells Fargo have issued structured notes that later drew regulatory scrutiny.
The FINRA arbitration process for structured note claims
Most structured note disputes are resolved through FINRA arbitration rather than court litigation. The process is typically faster and less expensive than a civil trial, but it requires a specific legal strategy tailored to securities law. Here is what the process looks like for an investor who believes their broker misrepresented or unsuitably recommended structured products:
- Free case assessment. Our attorneys review your account statements, trade confirmations, and the structured note prospectus to identify red flags. This assessment is free and carries no obligation.
- Statement of Claim filing. If the facts support a claim, we file a Statement of Claim with FINRA naming the broker and the firm. The claim typically alleges unsuitability, misrepresentation, failure to supervise, or breach of fiduciary duty under SEC Regulation Best Interest.
- Discovery and document production. The broker-dealer must produce supervisory records, internal communications, compliance manuals, and training materials. These documents often reveal whether the firm knew the broker was pushing structured notes aggressively.
- Hearing before a FINRA arbitration panel. A panel of one or three arbitrators hears testimony from both sides. Our attorneys present expert testimony on structured product mechanics and suitability standards.
- Award and recovery. If the panel rules in the investor’s favor, the award typically includes compensatory damages, interest, and attorney fees. Our firm works on a contingency fee basis, so we only collect if we recover funds for you.
The timeline from filing to award typically ranges from 12 to 18 months. FINRA arbitration awards are binding and enforceable in court if the broker-dealer does not comply voluntarily.
Structured notes loss recovery: what investors can expect
Recovery amounts in structured note cases vary based on the size of the loss, the strength of the evidence, and the specific claims asserted. In our experience, the most successful claims involve one or more of the following elements:
- Clear misrepresentation — the broker described the product as safe, principal-protected, or bond-like without disclosing embedded derivative risk.
- Documented unsuitability — the client’s risk profile, age, or net worth made structured notes inappropriate, yet the broker recommended them anyway.
- Overconcentration — the broker concentrated the portfolio in a single issuer’s structured notes or a single product type, magnifying risk.
- Failure to supervise — the firm knew or should have known the broker was selling unsuitable structured products and failed to intervene.
Our 98% success rate reflects disciplined case selection and deep experience in structured product mechanics. We only accept cases where the facts support a viable claim, which means every client we represent receives our full attention and resources.
Frequently asked questions about structured note losses
Q: Can I recover losses from structured notes if my broker said they were safe?
A: Yes. If your broker misrepresented the risk profile of structured notes — for example, by comparing them to bonds or CDs without explaining issuer credit risk, illiquidity, or embedded derivatives — you may have a claim for misrepresentation or unsuitability under FINRA Rule 2111. Our firm has recovered millions for investors in exactly this situation.
Q: How long do I have to file a claim for structured note losses?
A: The deadline depends on your state’s statute of limitations and the arbitration rules governing your brokerage agreement. In many cases, the clock starts when you discovered or should have discovered the misconduct, not when the loss occurred. We recommend contacting an attorney as soon as you suspect a problem, because delays can hurt your ability to recover.
Q: What does it cost to hire a structured notes loss lawyer?
A: Haselkorn & Thibaut works on a contingency fee basis. We do not charge upfront fees or hourly rates. We only collect if we recover funds for you. The initial consultation is free.
Q: What is FINRA arbitration and do I have to go to court?
A: FINRA arbitration is a private dispute resolution process administered by the Financial Industry Regulatory Authority. Most brokerage agreements require investors to arbitrate rather than sue in court. Arbitration is typically faster than litigation, and awards are binding. Our attorneys handle the entire process, from filing the claim to the final hearing.
Q: Which issuers have the most structured note complaints?
A: The largest issuers — including Citigroup, Morgan Stanley, Goldman Sachs, Wells Fargo, Royal Bank of Canada, Barclays, Bank of America, Credit Suisse, and J.P. Morgan — have all issued structured notes that later generated investor complaints. The issue is rarely the issuer alone; it is usually the broker who recommended the product without adequate explanation or suitability analysis.
Contact a structured notes loss lawyer today
If you lost money in structured notes, autocallables, reverse convertibles, or principal-protected products, you are not alone. Thousands of investors have suffered similar losses, and many have recovered substantial sums through FINRA arbitration. At Haselkorn & Thibaut, we offer free consultations, work on contingency, and have a 98% success rate in securities cases.
Call 1-888-885-7162 or visit our structured notes investor guide for more information on how these products work and what warning signs to watch for. Our offices serve clients in Florida, Texas, North Carolina, Arizona, and New York.