January 22, 2016 Comments (0) Blog

UBS ETRACS 2xMonthly Leveraged S&P MLP Index ETN due July 14, 2045 Investigation

(Last Updated On: March 31, 2017)

Have you suffered losses investing in UBS’s ETRACS 2xMonthly Leveraged S&P MLP Index ETN due July 14, 2045 (NYSE Arca Ticker: MLPV) (CUSIP: 90274D531) (“MLPV”)?  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.

MLPV is an exchange-traded note (“ETN”) that is linked to the monthly compounded 2x leveraged performance of the S&P MLP Index (the “Index”), less investor fees.  Exchange-traded notes trade intraday like exchange-traded funds but are debt instruments, issued by banks, that own no assets.  MLPV pays a variable quarterly coupon that is linked to the cash distributions associated with the underlying MLPs in the Index.

According to UBS’s ETRACS Prospectus, “[i]f, at any time, (1) the indicative value on any Index Business Day equals $5.00 or less or (2) the intraday index value on any Index Business Day decreases 30% from the most recent Monthly Initial Closing Level (each such day, an ‘Acceleration Date’), all issued and outstanding Securities will be automatically accelerated and mandatorily redeemed by UBS (even if the indicative value would later exceed $5.00 or the intraday index value would increase from the -30% level on such Acceleration Date or any subsequent Index Business Day) for a cash payment equal to the Acceleration Amount.”  MLPV’s net asset value fell so far, so fast, that it hit the acceleration trigger, and on January 20, 2016, UBS issued a press release announcing “that all outstanding notes of the ETRACS 2xMonthly Leveraged S&P MLP Index ETN due July 14, 2045 (Ticker: MLPV) (the ‘Securities’) will be mandatorily redeemed in accordance with the terms of the Securities as a result of the occurrence of an Acceleration Event, triggered as a result of the intraday indicative value of the Securities being equal to or less than $5.00 on January 20, 2016 (the ‘Acceleration Date’).”

The White Law Group is investigating the liability brokerage firms may have for recommending MLPV.  Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income.  Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

If you suffered losses in UBS’s ETRACS 2xMonthly Leveraged S&P MLP Index ETN due July 14, 2045 and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit http://www.whitesecuritieslaw.com.