In December 2013, The Financial Industry Regulatory Authority (FINRA) ordered Atlanta based broker-dealer J.P. Turner & Company to pay $707,559 in restitution to 84 customers for sales of unsuitable leveraged and inverse exchange-traded funds (ETFs) and in connection with excessive mutual fund switches. See FINRA press release here.
According to Brad Bennett, the Executive Vice President and Chief of Enforcement, “Securities firms and their registered reps must understand the complex products they are selling and the risks inherent to the products, and be able to determine if they are suitable for investors before recommending them to retail customers. Firms also have a fundamental obligation to monitor conservative investments such as mutual funds to ensure that investors are not abused by excessive trading.”
Leveraged and inverse ETFs are revalued daily and in volatile markets significant losses may result. FINRA found that JP Turner allowed its brokers to recommend these complex investments with understanding their risks and to sell them to retirees and conservative investors.
FINRA also found that J.P. Turner engaged in a pattern of mutual fund switching causing customers to pay excessive commissions and sales charges.
If you have questions about the way your brokerage account is being handled or have unexplained losses, call to speak with an experienced securities attorney.
Rex Securities Law , located in Boca Raton, FL, 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.
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