Securities Lawyers Blog
The investment attorneys with Gana Weinstein LLP are investigating investors who were inappropriately recommended UBS ETRACs related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in these speculative and volatile investment offerings. UBS ETRACs are exchange-traded notes that track and provide monthly payments based on a variety of market indexes. Many of the ETRACs offerings amplify their returns and risk of the index through the use of leverage.
ETRACs symbols include HDLV, SMHD, DVHL, CEFL, CEFZ, BDCL, LBDC, MORL, MRRL, LRET, MLPQ, HOML, MLPZ, LMLP and WTID.
Close to 30 of these ETRACs leveraged and inverse exchange-traded products had been delisted, closed, or automatically accelerated due to volatility in the wake of COVID-19. These products are being delisted as they fall in value below the minimum listing standard outlined in the offering documents.
As a background, an exchange-traded note (ETN) is an unsecured debt security issued by an underwriting banking institution. Many of the largest brokerage firms underwrite these types of products due to the large fees that they can generate for simply creating the security. Similar to other kinds of debt securities ETNs have a maturity date. ETNs also carry the risk that they are backed only by the creditworthiness of the issuer and not the value of the underlining securities.
ETRACs investments effected include: