Hutton Law Group Prosecuting Options Transactions Represented as “Principal-Protected”
Posted on Apr 1, 2011
Hutton Law Group is prosecuting claims against brokerage firms that have lured risk-adverse clients into certain options transactions represented as “principal-protected.” In fact, these investments are not “principal-protected” but are designed to enrich the brokerage firm who acts as the counterparty under the options arrangement. These cases may be similar to a derivative swap transaction in which the highest German appeals court ruled that Deutsche Bank concealed vast price disparities from one of its investors in a swap transaction—price disparities that favored Deutsche Bank as the counterparty to the transaction, to the detriment of the investor.
American brokerage firms have been offering similar derivative investments represented as “principal-protected,” sometimes using “zero premium” or price “floor.” In reality, the investments using certain option strategies can be very dangerous to the investor, while simultaneously enriching the brokerage firms, who are the counterparties in the arrangements.
If you have been harmed by options transaction where your brokerage firm is the counterparty under an options arrangement represented as “principal-protected,” contact the Hutton Law Group for more information.
Hutton Law Group (“HLG”) is a law firm located in San Diego, California, that is dedicated to outstanding advocacy in the representation of investors in complex financial disputes. Our attorneys have experience representing clients in cases involving securities law, corporate governance, corporate fraud, breaches of fiduciary duty andother forms of corporate misconduct. Investors who are in need of legal help may contact the firm’s lawyers at (858) 793-3500.