Investor Alerts

FINRA is updating this Alert to tell you about some of the latest online identify theft scams targeting financial sector customers and to provide tips for spotting and avoiding these scams.

Reverse convertibles are debt obligations of the issuer that are tied to the performance of an unrelated security or basket of securities. Although often described as debt instruments, they are far more complex than a traditional bond and involve elements of options trading. FINRA is issuing this alert to inform investors of the features and risks of reverse convertibles.

The retail market for structured notes with principal protection has been growing in recent years. While these products often have reassuring names that include some variant of "principal protection," "capital guarantee," "absolute return," "minimum return" or similar terms, they are not risk-free. FINRA and the SEC's Office of Investor Education and Advocacy are issuing this alert to make investors aware of these risks and to help them better understand how these products work.

It’s no secret that when a promising company emerges or an industry sector becomes “hot,” investors typically flock to get a piece of the action. But what happens when the company is privately held and investors can’t readily buy shares because the company has not conducted an initial public offering of its stock? FINRA is issuing this alert to warn investors about pre-IPO scams purporting to offer access to shares of Facebook and other popular, well known private companies.

Given the turbulence affecting the financial services industry these days-including recent announcements concerning Lehman Brothers-you may be wondering what would happen to your securities account if your brokerage firm closed its doors.

FINRA updated and is reissuing our 529 saving savings plan investor alert to highlight Jobs Act changes, and to remind investors to closely consider both their state of residency and the applicable fees—including fees associated with share classes—when making 529 investment decisions.

Lately, more and more seniors are hearing about opportunities to sell their existing life insurance for cash in transactions known as life settlements. A life settlement, or senior settlement, as they are sometimes called, involves selling an existing life insurance policy to a third party--a person or an entity other than the company that issued the policy--for more than the policy's cash surrender value, but less than the net death benefit.

When you think of investments and brokerage firms, you probably think of opening an account and buying stocks, bonds, or mutual funds. When you enter into a subordination agreement, you are making an investment, but the investment is in the brokerage firm itself.

We are issuing this Alert out of a concern that employees who have the opportunity to invest in company stock may be concentrating too much of their retirement savings in a single security. Of particular concern are employees who have all or most of their 401(k) assets in their employer's stock. If the stock takes a beating, so does your retirement savings.

If you own a life insurance policy, you may have been approached to exchange it for another new policy. You need to know that even though the tax laws make the exchange income tax free and the new policy may appear better to you, you may be losing - not gaining - if you make the exchange.