Haselkorn & Thibaut, a national investment fraud law firm, is investigating potential sales practice violations by financial advisors who were recommending UBS ETRACS Monthly Pay 2x Leveraged Closed-End Fund ETN Series B (Symbol: CEFZ) to investors.
The recent trading in CEFZ has been in the $5.00/share range and even lower. Looking back, over the second half of 2019, CEFZ was generally trading at or above $13.50/share, and that trend continued into late February 2020. The year-to-date total return is currently over -50%.
CEFZ tries to link the price return version of the ISE High Income™ Index. The CEFZ etns are senior unsecured debt securities issued by UBS. CEFZ return a monthly compounded 2x leveraged long exposure to the performance of the Index. The ISE index measures the performance of thirty US closed-end funds that are ranked and selected by the Index Sponsor.
Recover ETRAC CEFZ Losses
For investors, this is a particularly severe blow as these are the types of securities that were recommended by financial advisors and stockbrokers to clients who were looking for income. Clients getting the recommend expected there to be low volatility and relatively conservative risk. Unfortunately, investors are now faced with high losses as a result of a much higher level of risk to their original investment principle that was most likely never properly disclosed (if it was ever disclosed at all) by their stockbrokers.
Many of the strategies of leveraged etns were used in the hopes of increasing potential returns or income, but unfortunately, they also dramatically increased the level of risk. The problem is that a lot of investors may not have been advised of the potential risks.
Financial advisors may try to claim that these were unforeseen market events due to the coronavirus. Still, the reality is that these are very similar risks to those encountered in the last financial crisis. These potential market risks were material risks that should have been adequately disclosed to clients before recommending clients these investments.
Investors Seeking to Recover CEFZ Losses
One of the best ways for investors to recover CEFZ losses is through a private FINRA arbitration. It enables the customer to bring a claim and potentially recoup their investment losses of DVHL. FINRA arbitration disputes usually only involve simple paper discovery and without any depositions. Also, they are generally faster and more efficient compared to traditional court litigation. You can read more on how to sue a financial advisor.
About Haselkorn & Thibaut, P.A.
Haselkorn & Thibaut is a national law firm that specializes in helping investors. We have over 45 years of experience and recovered millions for clients. Cases are usually handled on contingency with no recovery, no fee terms. Call today for more information at 1-800-856-3352.