For far too long, brokers have been selling their older clients complex investments known as structured products. These products are so risky, and so costly in fees, that some of them are almost sure money losers. They entered retirement portfolios like Trojan horses, and then destroyed people’s life savings. Yet the financial meltdown of 2008 has not chastened Wall Street. Brokers and banks continue to sell these high-risk investments to people who can’t afford major losses. Last year, banks and brokers sold more than $52 billion of these products — including at least $32 billion by the top banks alone — mostly because they are hugely profitable to the banks and brokers themselves.

Individual investors have lost at least $113 billion and counting from Wall Street’s most toxic retail investments, which go by myriad names such as reverse convertibles, equity-linked, buffered or enhanced notes. Actual losses could be ten times that, since most burned investors don’t confront their brokers or win back their money.

Many individual investors are still struggling to recover catastrophic losses suffered from investing in complex derivative-based vehicles that tanked in 2008. Now, long after the top banks were bailed out and recapitalized by taxpayers and the Federal Reserve, Wall Street continues to sell these dangerous complex products, which lie in wait, ready to unleash a shocking new wave of financial pain.

This latest round of Wall Street chicanery involves opaque derivatives once sold exclusively to sophisticated institutional investors, who only held small portions of them in multi-billion-dollar portfolios. In recent years, these complex “structured” derivative products — wagers based on other financial instruments — have been falsely repackaged by Wall Street as ways to preserve principal for yield-starved Main Street investors.

Few investors fully understand what they’ve been sold, or understand that these products are like a ticking time bomb. When these products are sold to seniors, as they frequently are, it threatens their retirement security, as the investments are loaded with risky derivatives and contain no viable income guarantees. Even when investors discover that they’ve lost money, the system is designed to thwart efforts to recover such losses.

This trend was documented by more than a year’s worth of research involving interviews with investors, state securities regulators, investors’ attorneys and officials with the Securities and Exchange Commission (SEC). This paper examines what these investments are, how they are sold and what Congress and the SEC need to do to protect investors.