Recently, Morgan Keegan entered into a settlement with FINRA for conduct surrounding non traditional etfs sold to retail customers. The following is information from FINRA’s website.
Morgan Keegan & Company, Inc. (CRD #4161, Memphis, Tennessee)
submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $365,000. The firm consented to the described sanctions and to the entry of findings that it failed to establish and maintain a supervisory system, including written procedures reasonably designed to achieve compliance with NASD® and/ or FINRA rules in connection with the sale of Non-Traditional Exchange-Traded Funds (NonTraditional ETFs) in accounts where the firm provided brokerage services to certain retail customers, and failed to provide adequate formal training to its registered representatives and supervisors regarding the features, risks and characteristics of Non-Traditional ETFs.
Also, the findings stated that the firm supervised Non-Traditional ETFs as it supervised traditional ETFs until FINRA issued its June, 2009, Regulatory Notice. Morgan Keegan relied on its general supervisory procedures to supervise transactions in Non-Traditional ETFs during the relevant period, but the general supervisory system the firm had in place was not sufficiently tailored to address the unique features and risks involved with these products. They did not create a procedure to address the risks associated with longerterm holding periods in Non-Traditional ETFs.
FINRA’s findings also stated that the firm allowed certain of its registered representatives to recommend to customers a Non-Traditional ETF without performing reasonable diligence to understand the risks and features associated with it.
(FINRA Case #2009019113501)
Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you have sustained investment losses due to your stock broker or financial advisor’s recommendations regarding ETFs, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: https://www.securitieslawyer.com.CONTACT US