SEC News
- SEC Charges Chicago-Area Father and Son Conducted Cherry-Picking Scheme at Investment Firm May 16, 2013FOR IMMEDIATE RELEASE2013-90 Washington, D.C., May 16, 2013 — The Securities and Exchange Commission today charged a father and son and their Chicago-area investment advisory firm with defrauding clients through a cherry-picking scheme that garnered them nearly $2 million in illicit profits, which they spent on luxury homes, vehicles, and vacations. Addition […]
- SEC Names Keith F. Higgins as Director of Division of Corporation Finance May 15, 2013FOR IMMEDIATE RELEASE2013-89 Washington, D.C., May 15, 2013 — The Securities and Exchange Commission today named Keith F. Higgins as the new director of the agency’s Division of Corporation Finance. Mr. Higgins comes to the SEC from the law firm of Ropes & Gray LLP where he is a partner in its Boston office with 30 years of experience advising public com […]
- SEC Names Lona Nallengara as Chief of Staff May 15, 2013FOR IMMEDIATE RELEASE2013-88 Washington, D.C., May 15, 2013 — The Securities and Exchange Commission today announced that Lona Nallengara has been named the agency’s chief of staff. Mr. Nallengara came to the SEC in March 2011 and served as deputy director for legal and regulatory policy in the Division of Corporation Finance until he was appointed in Decemb […]
- SEC Charges China-Based Executives in Scheme to Overstate Revenues and Divert Money for Personal Use May 15, 2013FOR IMMEDIATE RELEASE2013-87 Washington, D.C., May 15, 2013 — The Securities and Exchange Commission today charged husband-and-wife executives at a China-based company with engaging in a scheme to overstate the company’s revenues and divert proceeds from a securities offering for their personal use. Additional Materials SEC Complaint The SEC alleges that RIN […]
- SEC, FINRA Issue Investor Alert On Pension or Settlement Income Streams May 9, 2013FOR IMMEDIATE RELEASE2013-86 Washington, D.C., May 9, 2013 — The Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA) today issued an investor alert entitled Pension or Settlement Income Streams – What You Need to Know Before Buying or Selling Them. The investor alert informs investors about the risks involved when selli […]
TAG | Morgan Stanley & CO LLC
7
ETFs Need Closer Attention, Says Senator Reed
Comments off · Posted by Securities Lawyer in FINRA
This past Tuesday, May 1st., FINRA, the Financial Industry Regulatory Authority, Inc. fined four major brokerages $9.1 million for selling complex ETFs (Exchange Traded Funds) to investors whose portfolios were otherwise conservative.
Without admitting or denying the charges, the brokerges will be paying $7.3 million in fines, and $1.8 million in restitution to the clients who bought inverse and leveraged ETFs. Those brokerages are: Citigroup Global Markets Inc, Morgan Stanley & Co., LLC, Wells Fargo Advisors, LLC, and UBS Financial Services.
The chairman of the Senate Banking Subcommitte on Securities, Insurance, and Investment, Sen. Jack Reed, D-RI, announced that he will follow up on the hearing he held last October on ETFs with another hearing in the next few weeks.
“My hearing last fall shined a light on these products, which may be affecting market structure, volatility and price discovery and has the potential to harm investors,” Sen. Reed said. “I think this market deserves more attention from both domestic and foreign regulators, and I plan to hold another hearing on ETFs and related issues in the near future.”
Finra felt he brokerages it disciplined had failed to educate their reps about the complexities – and dangers – of leveraged and inverse ETFs, which hold derivatives and magnify market movements. The brokers then sold them to uninformed investors.
“The added complexity of leveraged and inverse exchange-traded products makes it essential that brokerage firms have an adequate understanding of the products and sufficientily train their sales force before the products are offered to retail customers,” Brad Bennett, Finra executive vice president and chief of enforcement, said in a statement. “Firms must conduct reasonable due diligence and ensure that their representatives have an understanding of these products.”
brokerage supervisory deficiencies · brokers recommending risky investments · Citigroup Global Markets Inc · complex ETFs · etf losses · Exchange-Traded Funds · failure to supervise brokers · Financial Industry Regulatory Authority · FINRA · FINRA arbitration · finra lawyer · Ft. Lauderdale Securities Lawyer · high risk investments · inadequate supervisory procedures by broker/dealers · inverse ETFs · Lars K. Soreide · Leveraged ETFs · leveraged exchange traded funds · leveraged inverse ETF's · Morgan Stanley & CO LLC · risky investments · securities lawyer · Soreide Law Group PLLC · Stock fraud lawyer · supervisory failures · UBS Financial Services Inc · Wells Fargo Advisors LLC
