Firm Fined and Censured by FINRA for Failure to Deliver Prospectuses to Clients on ETFs

The following summary of information is available on FINRA's Website under “Disciplinary and Other FINRA Actions, May, 2014.”

Investors Capital Corp. (CRD #30613, Lynnfield, Massachusetts)

was censured and fined $100,000 by FINRA.

According to the FINRA report, allegedly Investors Capital Corp. failed to give exchange-traded fund (ETF) prospectuses to their customers.

(The definition in finance of a prospectus is: a disclosure document that describes a financial security for potential clients. It provides investors with material information on the investments. It can make potential customers aware of such things as a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information. A prospectus should be distributed by brokerages to all it's potential investors.)

FINRA's findings stated that Investors Capital allegedly failed to establish an adequate supervisory system regarding the sale of ETFs and Investors Capital's obligations to provide ETF prospectuses to their clients. Investors Capital did not have any procedures in place concerning the sale of ETFs or their obligations to provide ETF prospectuses to their customers. FINRA reported that Investors Capital allegedly permitted representatives to sell ETFs before completing firm-mandated training.
(FINRA Case #2011025319501)

This ends the summation FINRA's information.

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