Articles Posted in Stockbroker Misconduct

Investors whose brokers or financial advisors recommended that they invest in Steepener Notes (a/k/a “Steepeners”) may have incurred losses due to the risky and complex nature of these products. Steepeners, which are tied to U.S. treasury interest rates, have left investors stuck in illiquid investments while receiving little to none of the regular income they were promised.

What Is A Steepener Note?

Steepener Notes are non-traditional and long-term investments that pay a quarterly or monthly interest payment that is tied to the yield curve, which measures the interest rates on U.S. Treasury securities. Steepener Notes are a type of “structured product”: for the first year or two, the issuer pays investors an above-average rate of interest (often referred to as “teaser” rate), and then, for the remainder of the note—often 15-30 years—the rate is determined by a complex formula. Continue reading ›

Silver Law Group is currently investigating broker-dealer firms and financial advisors that improperly marketed and sold Steepener Notes, which are non-traditional, long-term, illiquid, and highly complex products that many brokerage firms have been selling to unsuspecting clients over the past decade.

Steepener Notes are structured products that pay a regular interest payment that is tied to the yield curve, which measures interest rates on U.S. Treasury securities. The amount of the payment is calculated based on the difference between long-term and short-term interest rates. Thus, the “steeper” the curve, the better the investment performs. However, it means that Steepener Notes are risky. If the yield curve is flat, as it has been for much of the last decade, the payments to investors are minimal or zero. Similarly, if the yield curve is inverted, as it was in 2018, investors do not receive any interest payments. Continue reading ›