May 12, 2015 Comments (0) Blog, Securities Fraud

Recovery of Credit Suisse Reverse Convertible Notes Losses

(Last Updated On: July 17, 2015)

Have you suffered losses investing in Credit Suisse Reverse Convertible Notes? If so, the securities attorneys of The White Law Group may be able to help you recover your losses in a FINRA arbitration claim against the brokerage firm that recommended the investment.

Reverse Convertible Notes (“RCNs”) are extremely complex investments that often involve terms, features and risks that can be difficult for individual investors and investment professionals alike to evaluate. In fact, in most cases the investor in an RCN bears all of the downside risk while the issuer of the note receives all of the potential upside.

RCNs are notes whose repayment of principal is linked to the lowest value of the reference security during the RCN’s term. If the reference security’s value drops below a “trigger” price during the RCN’s term, then the RCN will pay the lesser of its face value or the market value of the shares that could have been purchased with the RCN’s face value on the pricing date.  If the reference security’s value does not drop below the “trigger” price, then the RCN will pay its face value at maturity.

Essentially, in addition to taking on the credit risk of the issuer, the investor also takes on the price risk of the referenced security or securities. Meanwhile, the issuer has passed its risk on to the unsuspecting investor. Notably, the issuers of RCNs are generally large financial institutions, such as Credit Suisse, while the investor is typically an unsophisticated individual who is attracted by the high coupon rate and doesn’t understand the level of risk that comes with these highly complex structured investments.

Furthermore, the issuer charges an up-front fee to assemble and package the RCN’s components. The fee typically ranges from one percent to eight percent or more, and is usually described in the prospectus as “built-in costs” or “costs of hedging.”

The investor is also exposed to potential liquidity risk. The issuer is not required to maintain a secondary market, and, like most structured products, there may be no buyer if the investor needed to liquidate the RCN prior to maturity.

Altogether, RCNs are extremely complex, high-risk, and frequently illiquid investments that are difficult to understand and are not suitable for unsophisticated investors.

Brokerage firms that sell RCNs are required to evaluate whether they are suitable given the investor’s age, risk tolerance and investment objectives, net worth, and investment experience. Firms that make unsuitable recommendations can be held responsible for losses in a FINRA arbitration claim.

If you suffered losses investing in Credit Suisse Reverse Convertible Notes and would like a free consultation with a securities attorney, please call The White Law Group at 312-238-9650.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit http://www.WhiteSecuritiesLaw.com.

The following is a list of some of the Credit Suisse Reverse Convertible Notes offered:

CUSIP Issuer Product Name
22542DAZ3 Credit Suisse Reverse Convertible Notes linked to Garmin Ltd.
22542DBC3 Credit Suisse Reverse Convertible Notes linked to Vale S.A.
22542DBD1 Credit Suisse Reverse Convertible Notes linked to Akamai Technologies, Inc.
22542DBE9 Credit Suisse Reverse Convertible Notes linked to Energy Conversion Devices, Inc.
22542DBG4 Credit Suisse Reverse Convertible Notes linked to Ciena Corporation
22542DBL3 Credit Suisse Reverse Convertible Notes linked to Cameco Corp.
22542DBS8 Credit Suisse Reverse Convertible Notes linked to Apple, Inc.
22542DBT6 Credit Suisse Reverse Convertible Notes linked to PG&E Corporation
22542DCB4 Credit Suisse Reverse Convertible Notes linked to Apple, Inc.
22542DBY5 Credit Suisse Reverse Convertible Notes linked to Southern Copper Corp.
22542DBZ2 Credit Suisse Reverse Convertible Notes linked to Weatherford International Ltd.
22542DCA6 Credit Suisse Reverse Convertible Notes linked to Apple, Inc.
22542DCG3 Credit Suisse Reverse Convertible Notes linked to Goldman Sachs Group, Inc.
22542DCJ7 Credit Suisse Reverse Convertible Notes linked to Apple, Inc.
22542DCR9 Credit Suisse Reverse Convertible Notes linked to Schlumberger, Ltd.
22542DCW8 Credit Suisse Reverse Convertible Notes linked to EMC Corporation
22542DDD9 Credit Suisse Reverse Convertible Notes linked to BP plc.
22542DCZ1 Credit Suisse Reverse Convertible Notes linked to ITAU Unibanco Holdings S.A.
22542DDB3 Credit Suisse Reverse Convertible Notes linked to U.S. Steel Corp.
22542DDE7 Credit Suisse Reverse Convertible Notes linked to Eagle Bulk Shipping Inc.
22542DDH0 Credit Suisse Reverse Convertible Notes linked to Owens-Illinois, Inc.
22542DDJ6 Credit Suisse Reverse Convertible Notes linked to Rent-A-Center, Inc.
22542DDN7 Credit Suisse Reverse Convertible Notes linked to Elan Corporation, Plc.
22542DDP2 Credit Suisse Reverse Convertible Notes linked to BP plc.
22542DDV9 Credit Suisse Reverse Convertible Notes linked to Intuit Inc.
22542DDT4 Credit Suisse Reverse Convertible Notes linked to Visa Inc
22542DDU1 Credit Suisse Reverse Convertible Notes linked to Ford Motor Co.
22542DEC0 Credit Suisse Reverse Convertible Notes linked to General Electric Company
22542DEG1 Credit Suisse Reverse Convertible Notes linked to General Electric Company
22542DDY3 Credit Suisse Reverse Convertible Notes linked to Visa Inc
22542DEA4 Credit Suisse Reverse Convertible Notes linked to General Motors Corporation
22542DEB2 Credit Suisse Reverse Convertible Notes linked to Petroleo Brasileiro S.A.
22542DED8 Credit Suisse Reverse Convertible Notes linked to Radioshack Corp.
22542DEF3 Credit Suisse Reverse Convertible Notes linked to Peabody Energy Corp.
22542DEH9 Credit Suisse Reverse Convertible Notes linked to Petroleo Brasileiro S.A.
22542DEL0 Credit Suisse Reverse Convertible Notes linked to Honda Motor Co., Ltd.
22546EXA7 Credit Suisse Reverse Convertible Notes linked to SPDR S&P 500 ETF Trust
22546EC36 Credit Suisse Reverse Convertible Notes linked to Caterpillar, Inc.
22546EC44 Credit Suisse Reverse Convertible Notes linked to Caterpillar, Inc.
22546E4Z4 Credit Suisse Reverse Convertible Notes linked to Caterpillar, Inc.
22546E5A8 Credit Suisse Reverse Convertible Notes linked to Caterpillar, Inc.
22546TEH0 Credit Suisse Reverse Convertible Notes linked to Marathon Petroleum Corp
22546TJL6 Credit Suisse Reverse Convertible Notes linked to Cummins, Inc.
22546TKX8 Credit Suisse Reverse Convertible Notes linked to Noble Corp.
22546T5H0 Credit Suisse Reverse Convertible Securities linked to Expedia, Inc.
22547Q3A2 Credit Suisse Reverse Convertible Notes linked to Lennar Corp.
22546T7F2 Credit Suisse Reverse Convertible Notes linked to Apple, Inc.
22547Q5P7 Credit Suisse Reverse Convertible Notes linked to Lennar Corp.
22547Q5U6 Credit Suisse Reverse Convertible Notes linked to Sandisk Corp.
22547QC79 Credit Suisse Reverse Convertible Securities linked to Restoration Hardware Holdings
22542DDA5 Credit Suisse Reverse Convertible Notes linked to Lehman Brothers
22542DCV0 Credit Suisse Reverse Convertible Notes linked to Lehman Brothers
22542DBV1 Credit Suisse Reverse Convertible Notes linked to Lehman Brothers
22542DBP4 Credit Suisse Reverse Convertible Notes linked to Lehman Brothers
22542DBF6 Credit Suisse Reverse Convertible Notes linked to The Bear Stearns Companies Inc.
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