Royal Bank of Canada (RBC) to Repay Investors of ETFs
It was recently announced that the Royal Bank of Canada (RBC) will repay investors in Massachusetts, $2.9 million on losses from leveraged and non-leveraged exchange-traded funds, also know as ETFs. This is just another example of the losses experienced, and now the crackdown on these very volatile funds.
Massachusetts’ top securities regulator, William Galvin, said in a recent statement, “This settlement details an inexcusable set of facts where the company was selling products it did not understand, and when it finally realized the risk and pitfalls of these investments it did not immediately restrict their marketing.”
The Financial Industry Regulatory Authority, FINRA, began issuing warnings regarding ETFs in 2009. They warned that these investments were not for the ‘long-term,’ conservative investors They are more for the short-term, professional, or day-trader. They are designed for short-term market returns on a day-to-day basis using derivitives.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, has warned investors through his website and marketing materials, as early as 2009, against buying and holding leveraged ETFs. Soreide Law Group has been filing lawsuits related to sales practices surrounding leveraged ETFs against brokerage firms nationwide since then.
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