Finra Fines Stifel Financial Regarding Complex ETF

Posted on January 23rd, 2014 at 9:25 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Two Stifel Financial Corp. brokerage units, Stifel, Nicolaus & Co. Inc. and Century Securities Associates Inc., were ordered by Finra to pay more than $1 million in fines and restitution for selling leveraged and inverse exchange-traded funds (ETFs) that were unsuitable for the investorsbetween January 2009 and June 2013.

Finra warns that brokerages must conduct reasonable due diligence on those and other complex products, sufficiently train their sales force and have adequate supervisory systems in place before offering them to retail investors.

Sales of inverse and leveraged ETFs have got regulator’s attention since 2009. In daily or short term trading, ETFs use futures or derivatives to multiply the daily returns of an index, or perform the opposite way against an index. However, in a longer term, the EFT’s returns can stray significantly from the intended daily result, and thus are not suitable as a buy and hold investment. 

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services. 

Related Attorneys: James J. Eccleston


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Thank You from the bottom of our hearts for all you have done for us. When we realized this was a very bad investment - we did not know where to turn for help. Then we received your name. When we called you - you were so kind to us and then agreed to help us. For this we are so very grateful. The world would be a much nicer place if there were more people like the two of you in it. We will always remember all the help and kindness you have shown us. Thank you so very very much for everything.

Wayne and Judy S.


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