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Robert Rex
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This blog is written by Robert H. Rex, Esq. who is a securities attorney and a passionate advocate for investors rights. With over 30 years of legal experience, 25 of which have dealt almost exclusively with the recovery of stockmarket and investment losses for mostly elderly clients, he and his... More
My company:
Rex Securities Law
My blog:
Rex Investment Loss Recovery Blog
  • Exchange Traded Fund (ETF) Sales Result In $9.1 Million FINRA Fine 0 comments
    May 2, 2012 12:47 PM

    The Financial Industry Regulatory Authority (FINRA) fined Citigroup, Morgan Stanley, UBS AG and Wells Fargo $9.1 million and ordered restitution to clients of $1.8 million on May 1, 2012, for selling leveraged and inverse exchange-traded funds (ETF's) "without reasonable supervision" and for making sales which were unsuitable to the purchasing investor.

    FINRA warned the industry in June 2009 that ETFs were difficult to understand (Regulatory Notice 09-31) and not a good fit for long-term investors.

    ETFs, which mimic indexes and are traded like stocks, use swaps or derivatives to amplify daily index returns. Inverse funds are designed to move in the opposite direction of their underlying benchmark. Since you may have had to read this paragraph twice to understand it, ETFs are not for everyone.

    We will providing more details regarding the findings FINRA made as to each firm soon.

    If you have suffered losses on ETFs, you may be able to recover damages through FINRA arbitration. We have been helping investors recover stock market losses for over twenty years. Nationwide representation. Free consultation. 561 391 1900

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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