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Rabih Msallem Discloses Customer Complaint Regarding Structured Note Investments

Rabih Msallem (CRD#: 3199470) is a dually registered Broker and Investment Adviser at Citigroup Global Markets, Inc. in Glendale, CA.

Broker’s Background

He entered the securities industry in 1999 and previously worked for Citicorp Investment Services; Cal Fed Investments; Gateway Investment Services, Inc.; Essex National Securities, Inc.; Stifel, Nicolaus & Company, Inc.; and Dean Witter Reynolds, Inc.

Current And Past Allegations Of Conduct Leading To Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in December 2022, a customer complaint was filed against Rabih Msallem. The allegation states, “Claimants allege lack of suitability and misrepresentation of sales of structured note investments.” The customer dispute is pending, and $2M in damages are requested.

In addition, Rabih Msallem has been the subject of one customer complaint, including the following:

  • August 2016 — “CLIENT ALLEGES THAT HE TOLD REGISTERED REPRESENTATIVE HE DID NOT WANT TO RISK HIS PRINCIPAL AND STATES THAT THE REGISTERED REPRESENTATIVE SOLD HIM A VARIABLE ANNUITY. CLIENT CLAIMS A LOSS OF $10,000 IN TWO YEARS, PLUS A LOSS OF $8,000 ASSOCIATED WITH SURRENDER CHARGES. DATE OF OCCURRENCE: OCTOBER 2013 THROUGH JANUARY 2016. TOTAL LOSSES (INCLUDING SURRENDER CHARGES): $18,000.” The customer dispute was denied.

For a copy of Rabih Msallem’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

In recent years, brokerage firms and Financial Advisers across the country have aggressively marketed and sold Steepener notes, adjustable rate market notes, spread linked notes, and structured notes to retail customers.

Steepener notes, adjustable rate market notes, spread linked notes, and structured notes are not traditional investments but rather structured products. During the first 12-24 months, the Steepener notes, adjustable rate market notes, spread linked notes, and structured notes generally pay above-average “teaser” rates of interest. However, for each year thereafter until maturity, which can often be 15-20 years, the interest the interest rate is determined by a complex formula that is correlated to a stock index, such as the S&P 500, a fixed income index or a derivative benchmark such as the Constant Maturity Swap Rate or CMS Swap rate. Depending on the value of the benchmark, the rate of interest paid to the investor may increase to a cap set forth in the prospectus or decrease to zero. These nuances are set forth in the prospectus of the Steepener notes, adjustable rate market notes, spread linked notes, and structured notes but generally not understood by retail customers.

In addition, some Steepener notes, adjustable rate market notes, spread linked notes, and structured notes have call features. This enables the issuer to call (or redeem) the security prior to maturity if, for example, the interest rate environment requires the issuer to pay higher than expected rates of interest to the investor. Alternatively, if the interest rate environment permits the payment of a lower rate of interest, the issuer is under no requirement to call the security. The call feature creates an imbalanced risk/return environment for the customer, who is often lured into the investment with the prospect of higher investment returns. In reality, to the extent a higher return is warranted pursuant to the prospectus, the issuer has the right to call the security if certain other conditions are met. This eliminates the possibility of the investor continuing to receive the higher income.

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at mwolper@wolperlawfirm.com.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]