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FINRA Fines Citi, Wells Fargo, UBS & Morgan Stanley for ETF Sales

FINRA Fines Citi, Wells Fargo, UBS & Morgan Stanley for ETF Sales

FINRA Fines Citi, Wells Fargo, UBS & Morgan Stanley for ETF Sales 150 150 Rex Securities Law

The Financial Industry Regulatory Authority (FINRA) fined Citigroup, Morgan Stanley, UBS AG and Wells Fargo $9.1 million and ordered restitution to clients of $1.8 million on May 1, 2012, for selling leveraged and inverse exchange-traded funds  (ETF’s) “without reasonable supervision” and for making sales which were unsuitable to the purchasing investor.

FINRA warned the industry in June 2009 that ETFs were difficult to understand  (Regulatory Notice 09-31) and not a good fit for long-term investors.

ETFs, which mimic indexes and are traded like stocks, use swaps or derivatives to amplify daily index returns. Inverse funds are designed to move in the opposite direction of their underlying benchmark. Since you may have had to read this paragraph twice to understand it, ETFs are not for everyone.

Here are details on the findings FINRA made on the Wells Fargo case. Click here for the details on the UBS case. Here for the details on the Morgan Stanley case.

Here for the details on the Citigroup case.

If you have suffered losses on ETFs, you may be able to recover damages through FINRA arbitration. We have been helping investors recover stock market losses for over twenty years. Nationwide representation. Free consultation. 561 391 1900

www.RexSecuritiesLaw.com

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