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:
ETRACS Monthly Pay 2xLeveraged U.S. High Dividend Low Volatility ETN (HDLV)
ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHD)
ETRACS Monthly Pay 2xLeveraged Diversified High Income ETN (DVHL)
ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (CEFL)
ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (CEFZ)
ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index ETN (BDCL)
ETRACS 2xLeveraged Long Wells Fargo Business Development Company ETN (LBDC)
ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN (MORL)
ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN (MRRL)
ETRACS Monthly Pay 2xLeveraged MSCI US REIT INDEX ETN (LRET)
ETRACS 2x Monthly Leveraged Alerian MLP Infrastructure Index ETN (MLPQ)
ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN (HOML)
ETRACS 2xMonthly Leveraged S&P MLP Index ETN Series B (MLPZ)
ETRACS Monthly Pay 2xLeveraged Wells Fargo MLP Ex-Energy ETN (LMLP)
ETRACS ProShares Daily 3x Inverse Crude ETN linked to the Bloomberg WTI Crude Oil Subindex (WTID)
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client after conducting due diligence. Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.