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Equity-Linked Notes (ELNs)

An Equity-Linked Note (ELN) is a debt instrument, usually a bond, where the payout is based on the underlying entity. The underlying equity of the ELN can be a collection of stocks, a single stock or an equity index. A typical ELN is usually principal-protected meaning that the investor is guaranteed the return of the initial investment, but as ELNs have become more exotic in nature, fewer ELNs are principal protected.

Generally, the final payment is the amount invested times the gain in the underlying stock or index times a note specific participation rate. For example, if the underlying equity gains 150% during the investment period and the participation rate is 50%, the investor would receive $2.25 for every dollar invested. If the equity remains unchanged or declines, the investor receives the full investment back. However, if the underlying equity defaults, the investor will receive only what is available after bankruptcy.

Investors should understand everything they can about the underlying equity because what may seem like a safe investment may fail. For example, in 2008 equity-linked notes tied to equity in Lehman Brothers failed. Many investors sued the broker-dealers for promising 100% principal protection and still losing money.

Client Reviews
Thank you Adam and all your colleagues for the professionalism and diligence in the final settlement of our securities fraud case. When a past law firm group turned our case down, you and your firm took on the case and we thank you for the great outcome. We would highly recommend your firm. Gloria K.
I will never forget how much you helped me by winning my case! I never thought I would see any money from my investment. I admire the way you fight for everyday people against big companies. Thank you so much! Myra W.
Adam is an outstanding lawyer. I have worked on several cases with Adam and look forward to working with him again in the future. Rob D. - Co-Counsel.
If you want an attorney that is easy to talk to and genuinely cares about your legal situation, contact Adam Gana. He helped me settle a difficult contract dispute. When you work with Adam, he makes you feel as if you are his top priority. He will call you regularly to stay on top of the situation and submits all necessary legal documentation in a timely manner. His writing is excellent, his demeanor professional, and his work exceptional. Nancy N.
Adam helped me recover money from my broker when I thought all was lost. My house was about to be foreclosed, and I lost everything. Adam came in and saved my life. Jean C.