Goodman & Nekvasil, P.A., May Recover Investor Losses – Do you have losses in Morgan Stanley Performance Leveraged Upside Securities?

According to Marketwatch:

There are “few pluses in Morgan Stanley’s Performance Leverage Upside Securities structured product.”

For starters, while the SPU turbocharges the market’s gains, it offers no protection from losses. If the index falls prior to maturity, so does the value of the note. There’s also a cost to getting the high-powered upside. After the agent’s commission, the investor could pay big because of how the index return is calculated.

Specifically, the SPU bases its return on the level of the index, not its total return. That’s a complicated way of saying “Kiss dividends goodbye.” Currently, the yield on the S&P 500 is about 1.7%. Own an index fund and you capture those dividends, which act as a cushion if the market falls; own the PLUS and the payouts don’t factor into your gain or mitigate a loss.

Next, there is the cap, which restricts your gains. Issuers of structured products must protect against having to pay the enormous leveraged gains that would occur if the index skyrockets; the SPU is capped at a maximum index gain of 6.75% over the 16-month term. Double the gain to reflect the leverage and the maximum gain is 13.5% over 16 months.

But perhaps the biggest drawback is that the SPU is so complicated that the average investor only latches on to the simple explanation, without understanding what they’ve really bought. It’s a pretty good bet that no investor wakes up in the morning and says “I need a ‘performance leveraged upside security’ today,” instead relying on what was heard in a sales pitch.

Goodman & Nekvasil, P.A. May Recover Investor Losses on Morgan Stanley Performance Leveraged Upside Securities

Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, continues to investigate brokerage firms that placed elderly retirees and other conservative investors in high-risk investments such as Morgan Stanley Performance Leveraged Upside Securities.

Goodman & Nekvasil, P.A., has filed hundreds of cases against brokerage firms selling high-risk investments such as Morgan Stanley Performance Leveraged Upside Securities and has recovered more than $180 million dollars on behalf of victimized investors.  We allege in these cases that these investment recommendations were unsuitable for our clients in view of their financial situation, needs and investment objectives.  All our cases are handled on a purely contingency fee basis.

You may have the right to recover your losses from the brokerage firm that sold you Morgan Stanley Performance Leveraged Upside Securities and other high-risk investments to you. We strongly recommend that you act quickly, however, because statutes of limitation can be short in securities cases.

Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA, has practiced in this area of the law for more than 35 years. We would like to discuss the possibility of your retaining our firm to represent you in an arbitration action.

There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf. Finally, the filing of such a case should not affect your ownership of these investments in any way.

If you incurred losses on your investment in Morgan Stanley Performance Leveraged Upside Securities and/or other high-risk investments and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.