Financial news

Record Damages Awarded to Customers by FINRA Arbitration Panel in Case Involving Structured Notes Recommendations

April 10, 2025 | Adam G. Schreck

In March 2025, Stifel Financial was ordered by a three person FINRA Arbitration Panel to pay a family of customer investors over $132 million related to overwhelming losses caused by misrepresentations surrounding structured note investments. The landmark award included almost $80 million in punitive damages and over $25 million in legal fees. Although the Panel declined to provide a reasoned award, public reporting of the case indicates that the broker at issue did not understand and failed to disclose risks associated with the investments to the customers and also utilized unsupervised, off-channel communications in recommending the investments. If your broker or advisor recommended investments in structured notes without fully disclosing the risks and you experienced unexpected losses, you should consult an experienced securities attorney, like the ones at Malecki Law in New York City. Malecki Law has successfully represented structured note investors in the past.

Structured notes are hybrid securities that come in many different forms but typically include a debt component and derivative component. The debt or bond component represents the larger portion of the investment and provides principal protection, although investors in most structured notes risk losing their entire investment. The derivative portion of the investment is intended to amplify the return of the overall investment. This is usually achieved by allocating a portion of the investment amount to an underlying asset (i.e., stock), a group of assets, or an index. While the derivative portion of the investment is meant to increase returns, this portion can also dramatically increase losses, making structured notes appropriate for only the most sophisticated investors with high-risk tolerances.

Although structured notes can offer investors considerable returns, these investments often come with hidden risks. First and foremost, structured notes are often extremely complex products with highly customizable features. Rarely are they one size fits all. Next, structured notes are typically sold by institutions, so they experience higher rates of default risk compared to traditional bonds or equity. The variability in the terms of structured notes has also made it difficult for secondary markets to develop, meaning structured notes have low liquidity and investors should expect to hold the investments until maturity. If you’ve experienced losses in structured note investments recommended by your advisor or broker, you should speak with Malecki Law, a seasoned investor protection law firm in Downtown Manhattan.

Are We Facing a Pro Crypto-Securities Future in the U.S.? – Announcement of the New SEC Chair and the Future of Bill FIT21

December 16, 2024 | Jacqueline Candella

On December 4, President-elect Trump announced that his pick for the next Securities and Exchange Commission (SEC) chair would be Paul Atkins. There seems to be a positive response to the news, as Bitcoin quickly traded over $100,000.

As Malecki Law has previously blogged, the current chair, Gary Gensler, has often been perceived a crypto skeptic. Although crypto fans were seemingly hopeful that Hester Peirce would be appointed, a current commissioner who is also known as “Crypto Mom,” the community does not seem disappointed in the direction of the SEC at all. Malecki Law gets sometimes multiple calls a day from people scammed around crypto based investments. This is likely due to the lack of regulation. If your advisor recommended that you purchase crypto securities against your best interests, and you suffered losses, you may have a claim. You should reach out to a Crypto-Securities law firm in New York, like Malecki Law, to review your situation. If someone in a foreign jurisdiction has your money, you may be out of luck.

Future SEC Chair Atkins’ Background

Single and Special Purpose Broker-Dealers in the Crypto Securities Space

November 20, 2024 | Jacqueline Candella

In recent times, we have seen an increase in retail investors wanting to invest in cryptocurrencies. However, the unknown and unregulated aspects of the cryptocurrency world may deter retail investors from owning cryptocurrency coins and tokens outright. A seemingly safer way curious retail investors can invest in crypto is to purchase and hold crypto based securities at their brokerage firm. Retail investors may see this as a mode to protect the investments against additional volatility and to provide some sort of oversight, but should be wary. If your broker recommended crypto based securities that were not in your best interest, you should reach out to a Crypto-Securities law firm in New York, like Malecki Law.

Additionally, with recent crypto spot ETF approvals by the SEC (first – Bitcoin, and second – Ether), we may see integration of crypto based securities into retail investors’ accounts at traditional brokerage firms. In fact, many investments you already own may have their own exposure to crypto.

In line with the growing interest in owning crypto based securities, it seems as though more single purpose brokerage firms that sell only crypto based securities continue to enter the investment markets, like Galaxy Digital Partners, LLC or Grayscale Securities, LLC.

E*Trade’s Platform Was Down While “Meme Stock” Leader “Roaring Kitty” Woke Up

May 13, 2024 | Jacqueline Candella

On May 13, 2024, E*Trade’s trading platform was down at market open, which caused its customers to be unable to sign in, halting their ability to buy or sell securities. Many retail investors took social media by storm about the event. If you were locked out of your online brokerage platform, you should consult an Investor Protection law firm in New York, like Malecki Law.

This may remind you of the GameStop short-squeeze and rise of Reddit investors during the wake of COVID, where a trading freeze ensued.

Keith Gill, who led the Reddit craze in 2021, also known as the “Roaring Kitty,” woke up from his social media nap and made his return by posting a picture on Sunday night of a man seemingly leaning forward in his video game chair, indicating the intent to become re-involved. Mr. Gill made a few other cryptic posts, one of which depicted a movie villain stating, “Fine, I’ll do it myself.”