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Callable CDs Alleged To Mislead Investors
Securities regulators are investigating investor complaints that they were misled in purchasing callable certificates of deposit, believing that they were short-term investments that were safe.
In fact, these types of CDs typically have maturities of 10 to 30 years, and are not safe - the principal (amount invested) is not guaranteed and fluctuates with market interest rates. Additionally, the "call" feature is not an advantage but a disadvantage to investors: only the issuer can call back the security. Many investors have complained that they were assured that the call feature allowed them to cash out anytime that they wished.
Source: Wall Street Journal, December 20, 2000
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Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
of general interest. It is neither intended to, nor constitutes, either legal advice or investment advice.
Always consult an attorney and/or investment advisor when building and protecting your wealth.
All content Copyright © 2008 Advocate Capital Management, Inc. except where noted. All rights reserved.
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