SLCG Issues "Dual Directional Structured Products"

WASHINGTON, May 9, 2012 /PRNewswire/ -- Securities Litigation and Consulting Group, Inc. ("SLCG") has issued a report on dual directional structured products (DDSPs) issued by several major banks since January 2011. The report's primary authors are Geng Deng, Tim Dulaney, Tim Husson and Craig McCann. Dr. Deng is Director of Research, Dr. Dulaney and Dr. Husson are Senior Financial Economists and Dr. McCann is Principal of SLCG. 

The SLCG study values DDSPs issued between January 2011 and May 2012. DDSPs combine features of absolute return barrier notes, buffered PLUS and reverse convertibles into one product. The study concludes that DDSPs tend to be priced at a significant premium to present value across issuers and underlying securities and that DDSPs with leverage on upside returns have a significantly lower average value than unleveraged DDSPs.

Until recently these exceedingly complex structured products were rare – only 3 were issued in 2011 but 35 were issued in just the first 4 months of 2012. Dr. McCann stated that while SLCG has been critical of the complexity and overpricing of retail structured products for many years, DDSPs seem to take those defects to new levels.

This study and other working papers are available at www.slcg.com/research.php Securities SLCG is a financial economics consulting firm based in the Virginia suburbs of Washington, DC.  Its staff includes PhD, MA and BA level professionals with academic, industry and government experience. Its experts have testified in state and federal court and various arbitration forums and are frequently quoted in national newspapers and the business press.

For further information about SLCG or its research, please contact Dr. Deng at 703.890.0741 or [email protected], Dr. Dulaney at 703.539.6777 or [email protected], Dr. Husson at 703-890-0743 or [email protected], Dr. McCann at 703-246-9381 or [email protected] or visit us at www.slcg.com.

SOURCE Securities Litigation and Consulting Group, Inc.