SEC, FINRA Warn Retail Investors About Investing In Structured Notes With Principal Protection

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On June 2, 2011, the Securities and Exchange Commission’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued an investor alert called Structured Notes with Principal Protection: Note the Terms of Your Investment to educate investors about the risks of structured notes with principal protection, and to help them understand how these complex financial products work.

For investors considering such an investment, one should be mindful that structured notes with principal protection can have complicated pay-out structures that can make it hard to accurately assess their risk and potential for growth, the lack of liquidity on your principal and the possibility of no profit on their initial investment.

For more information, please review “Structured Notes with Principal Protection: Note the Terms of Your Investment” on the Securities and Exchange Commission’s website, which includes a list of suggested questions investors should ask before investing in these type of products.

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