User 272317

Restricting Access to Leveraged ETFs - Are Brokerages Outlawing Products or Strategies?

when were the warning labels "dont hold for more than a day" added to the prospectus of these products??? I dont remember reading that -- though the fine print on these may have changed later. How this product was presented when put on the market -- specifically aimed at 401k holders that had no other shorting options!!! ---is that it was designed to give you a 2 or 3x times gain against the movement of that market. The risk of holding for more than a day or two was fraudulently misrepresented (if mentioned at all), nor were the technical aspects readily apparent to even sophisticated investors (as is the case with many of these leveraged products), and that is clearly why the Mass. financ. reg is stepping in.
its true that this is way too late for the brokerages to step in and say "sorry" to individual investors who got hosed (including myself). but it will be entirely appropriate for the SEC to come in and whack these products. Undoubtedly, the reason brokerages are stepping in to cut off a product that they sell and make a ton of fees on (since trading in and out of these products is the only way to make it work) is because they simply do not perform as represented broadly in the prospectus.