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Securities Regulator Bars Tyler, Texas, Broker for Selling Exchange Traded Funds (ETFs)

Securities Regulator Bars Tyler, Texas, Broker for Selling Exchange Traded Funds (ETFs)

Securities Regulator Bars Tyler, Texas, Broker for Selling Exchange Traded Funds (ETFs) 150 150 Rex Securities Law

March 21, 2012

We have warned investors in the past to be wary when buying ETF’s (Exchange Traded Funds). This is because many contain risks that are not apparent and not always explained and may not be suitable for retired persons and unsophisticated investors.

The FInancial Regulatory Authority (FINRA)  barred permanently Michael Venable, a broker from Tyler, Texas, for putting 10 of his middle class clients in unsuitable and highly leveraged ETFs.

FINRA found that these investments were not suitable for unsophisticated clients with conservative investment objectives and risk profiles. The clients were put into Direxion ETFs. Some of the Direxion ETFs invested by shorting parts of the market and trading on margin. Investors were not made aware of these risks when they purchased them. The investors ranged in age from 40 to 91 and had incomes frm $25,000 to $50,000 a year.

In addition, FINRA found that the broker traded the account excessively, an abuse we see all too often. One account with a $17,000 balance had commissions of $9,600 making it impossible for the account to ever realize any profit.

If you have losses in Direxion or have questions about the way your brokerage account is being handled, call to discuss your legal options with an experienced securities attorney.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

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