FINRA Fines and Suspends Vermont Broker for Recommending Non-Traditional ETFs to Conservative Investors

The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, October, 2013.”

Michael Eugene French (CRD #819126, Registered Supervisor, Essex, Vermont)

was fined $25,000 and suspended from association with any FINRA member in any capacity for three months. Without admitting or denying the findings, French consented to the described sanctions and to the entry of findings that he recommended and traded leveraged and inverse exchange-traded funds (non- traditional ETFs) in the accounts of an elderly married couple.

FINRA's findings said that the firm’s WSPs warned that non-traditional ETFs are speculative trading vehicles, and French’s customers advised him that they relied on the money in their accounts for their retirement. French recommended non-traditional ETFs to them based on his belief that global equity markets would decline and the securities would increase dramatically in value, thus recouping money that the customers had previously lost through a transaction that French recommended. French recommended the non- traditional ETFs without having reasonable grounds for believing that the securities were suitable for his customers in view of their financial situation, investment objectives and needs. The customers lost at least $29,000 of their principal because of their investments in non-traditional ETFs.
The suspension is in effect from August 19, 2013, through November 18, 2013.
(FINRA Case #2011029086901)

Michael Eugene French, according to FINRA's BrokerCheck, was previously registered with FINRA at the following brokerage firms:

WELLS FARGO ADVISORS, LLC
CRD# 19616
COLCHESTER, VT
08/2000 - 08/2011

FIRST ALBANY CORPORATION
CRD# 298
NEW YORK, NY
12/1998 - 08/2000

PAINEWEBBER INCORPORATED
CRD# 8174
WEEHAWKEN, NJ
04/1994 - 11/1998

This ends the summation for the information obtained on FINRA’s website.

If you have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding ETFs, call Soreide Law Group for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552.