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An Arcane Investment Hits Main Street Wall Street Journal - June 21, 2006 By Eleanor Laise And the fee listed in the prospectus may not show the total cost of the product. Industry experts say it's all but impossible for individual investors to assess all the fees involved in a structured product and determine if they're overpaying because derivative pricing is complex and issuers can cap investors' returns in many different ways. Investors would have to "dissect the note and put it all back together to figure out how much the investment bank is taking out in fees. It's very difficult to do," says Janet Tavakoli, who sold structured products at major financial institutions before starting an independent structured-finance consulting firm. END OF EXCERPT Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008). Janet Tavakoli's book on the global financial
meltdown is Dear Mr. Buffett: What An Investor Learns 1,269
Miles From Wall Street (Wiley 2009). TSF makes some information available to the general public. Please
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Janet Tavakoli, President:
jt@tavakolistructuredfinance.com
TEL: (312) 540-0243 |