FINRA Fines Broker-Dealer Over its Failure to Supervise Nontraditional ETFs

Posted on August 16th, 2017 at 10:17 AM
 FINRA Fines Broker-Dealer Over its Failure to Supervise Nontraditional ETFs

From the Desk of Jim Eccleston at Eccleston Law LLC:

FINRA has fined Atlanta-based Broker-Dealer, FSC Securities Corporation, $100,000 over allegations that it failed to supervise trades in risky, nontraditional exchange-traded funds (“ETFs”).

According to FINRA, despite the known risks of nontraditional ETFs, between 2009 and 2014, FSC Securities failed to perform any reasonable suitability analysis of 6,500 purchases of leveraged and inverse ETFs in roughly 1,400 customer accounts. FINRA also asserted that many of the risky products were sold to elderly customers, of whom were of a conservative or moderate risk tolerance.

In addition to paying the fine, FSC Securities agreed to pay approximately $492,000 to customers who lost money by holding the ETFs for an extended period of time.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial advisors including Broker Litigation & ArbitrationStrategic Consulting ServicesRegulatory  MattersTransition Contract Review, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: Jim Eccleston, Eccleston Law, Eccleston Law LLC, Eccleston, FINRA, broker-dealer

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