According to recent news reports, the Secretary of State of Georgia, who regulates securities firms, is investigating whether securities laws were violated by the sale of reverse convertible notes and similar securities to Georgia investors. According to a July 21, 2011 report in Bloomberg, the Secretary has issued subpoenas to UBS AG, Morgan Stanley, and Ameriprise Financial Inc. to determine how many reverse convertible notes each of these entities sold in Georgia and the names of the investors. According to a spokesperson for the Secretary’s office, “We have multiple investigations open with regard to the sale of reverse convertible notes, and will thoroughly review all evidence to ensure that Georgia investors are protected.”

With this investigation, Georgia joins a number of other states, including Texas, Massachusetts, and Alabama, that are reviewing structured product offerings.