ETRACS HDLV FINRA Lawsuit Investigation


Notice to UBS ETRACS Monthly Pay 2x Leveraged US High Dividend Low Volatility ETN (HDLV) investors. The Haselkorn & Thibaut, P.A. law firm is a nationwide investment fraud law firm ( investigating potential sales practice violations by financial advisors who were recommending ETRAC HDLV exchange-traded notes to investors.  HDLV is now defunt and ceased trading.

The recent trading in HDLV has been in the $7.50/share range. Looking back, over the second half of 2016, HDLV was generally trading at or above $30.00/share and by 2018 was still trading around $25.00/share and even higher at times. That trend continued through 2019 and even into early March 2020. Current price $0?  HDLV stopped trading on 3/18/20.

HDLV seeks a return linked to the performance of the price return version of the Solactive US High Dividend Low Volatility Index (the “index”). The Securities provide a monthly compounded two times leveraged long exposure to the performance of the index, reduced by the Accrued Fees. The index is designed to measure the performance of 40 dividend-yielding, relatively lower volatility index constituent Securities from the universe of the largest 1,000 U.S. listed stocks by market capitalization.

In general, exchange-traded notes (ETNs) are a type of unsecured debt security that tracks an underlying index of securities and trades on a major exchange like a stock would trade. ETNs are similar to bonds but do not pay interest payments. Instead, the price fluctuates similarly to a stock price. ETNs are typically issued by a financial institution to base returns on a market index. At maturity, the financial institution (in this case, UBS) takes out fees and gives the investor cash based on the return of the index it is tracking. ETNs do not represent investor ownership of the securities but are merely paid a return based on what the underlying index produces. The investors must trust that the issuing financial institution will make good on the return based on the underlying index.

HDLV Lawsuit Investigation


Haselkorn & Thibaut, P.A. is a nationwide investment fraud law firm investigating potential sales practice violations by financial advisors who were recommending HDLV and many similar ETRAC exchange-traded notes sold to investors.

For investors, this is a particularly harsh blow as these are the types of investments that were often recommended by financial advisors to clients who were looking for income in their portfolios (often retirees or similarly conservative investors). This was likely a recommendation that was expected to be low volatility and reasonably conservative, now investors are faced with substantial losses as a result of a level of risk to their original investment principal that was probably never correctly disclosed (if it was ever disclosed at all) by their financial advisors.

As some strategies are leveraged in the hopes of increasing potential returns, they also increased the level of risk, and some investors may not have been advised of those inherent risks as well.  Although Financial advisors may claim that these were unforeseen market events, the reality is that these are similar risks to those experienced in the 2008-2009 financial crisis. These potential risks were material risks that should have been properly disclosed to clients before recommending these investments individually or as part of a portfolio or investment strategy.

Many of these investments were sold by UBS Financial advisors and other financial advisors without proper risk disclosures, as these are considered very risky and complex (some even speculative because of the leverage) securities. In cases where these were recommended to retirees or similar conservative income-seeking investors there is the potential for sales practice abuse as a result of misrepresentations, but more often as a result of omissions of material fact, or due to a lack of proper supervision.

ETRAC HDLV Loss Recovery

For some investors, a private FINRA arbitration customer dispute enables them to bring a claim and potentially recoup their investment losses. These customer disputes typically involve only paper discovery and no depositions, and they are generally faster and more efficient compared to traditional court litigation, as they provide a private forum to resolve disputes more quickly and efficiently.

About Haselkorn & Thibaut, P.A.

Haselkorn and Thibaut specializes nationwide the handling investment fraud arbitration cases. The law firm has offices in Florida, New York, Arizona, North Carolina. The two founding partners have nearly 45 years of legal experience.

Haselkorn & Thibaut, P.A. has filed numerous (private arbitration) customer disputes with the Financial Industry Regulatory Association (FINRA) for customers who suffered investment losses relating to issues similar to those matters mentioned above. There are typically no depositions involved, and those cases are typically handled on contingency with no recovery, no fee terms. Experienced attorneys at Haselkorn & Thibaut, P.A., are available for a free consultation as a public service. Call today for more information at 1-800-856-3352.

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