Notice to UBS ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN (Symbol: MORL) investors that Haselkorn & Thibaut has started an investigation into the sales practices by financial advisors. We are investigating MORL stock for potential FINRA arbitration claims.
The recent trading in MORL has been in the $1.00/share range with a current price of $0.24! Looking back, over the second half of 2017, MORL was generally trading at or above $15.00/share and by 2018 was still trading between $12.00/share and $16.00/share. That trend continued through 2019 and even into early March 2020. The year-to-date total return is down over -95%.
MORL REIT seeks to link to the Market Vectors® Global Mortgage REITs Index. This index tracks the overall performance of publicly-traded mortgage REITs that receive at least fifty percent of their revenues from mortgage-related activities. The investments are senior unsecured debt securities issued by UBS. The Securities provide a monthly compounded two times leveraged long exposure to the performance of the Index, reduced by the Accrued Fees. This is a leveraged exchange-traded note (ETN).
In general, (ETNs) exchange-traded notes are a type of unsecured debt investment that tracks an underlying index of securities and trades on a major exchange like a stock would trade. They 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.
MORL FINRA Lawsuit By Investors
The Haselkorn & Thibaut, P.A. law firm is a nationwide investment fraud law firm (www.investmentfraudlawyers.com) investigating potential sales practice violations by financial advisors who were recommending MORL and many similar ETRAC exchange-traded notes sold to investors.
Please note that if you self-direct your investments with Robinhood, E-Trade, TD Ameritrade, Schwab, Fidelity, or Interactive Brokers, this investigation does not apply to you.
For investors, this is a particularly severe blow as these are the types of investments that were 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 fairly low volatility and relatively 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 adequately appropriately 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 increase the level of risk. Although Financial advisors may claim that these were unforeseen market events causing the substantial investment losses to clients, the reality is that for experienced financial advisors, these are the same (or at least substantially similar) risks to what was experienced in the 2008-2009 financial crisis. They should have disclosed those material risks to their clients before recommending these securities either 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 generally considered very risky and complicated (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.
Investors Seeking to Recover Losses For MORL
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. (InvestmentFraudLawyers.com)
Haselkorn and Thibaut, P.A. is a nationwide law firm specializing in handling investment fraud and securities arbitration cases. The law firm has offices in Palm Beach, Florida, on Park Avenue in New York, as well as in Phoenix, Arizona, and Cary, 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 Call 1-800-856-3352 or visit our website and email us from there at www.investmentfraudlawyers.com.