A National Securities Arbitration & Investment Fraud Law Firm
The SEC recently issued a press release for investors warning about leveraged and inverse ETF. This press release explains more and emphasizes that ETFs are not all the same. Not understanding the ETF type and how it works can lead to investor losses. Continue reading ›
Silver Law Group is investigating the following UBS ETRACS ETNs (Exchange Traded Notes): MRRL, WTIU, MLPZ, HOML, SMHD, HDLV, BDCL, LBDC, LMLP, DVHL, and MORL. These ETNs have suffered significant losses as the market has declined due to the coronavirus.
UBS created its ETRACS ETNs and may have marketed and sold them to investors seeking low risk without explaining the risks involved in those securities. Continue reading ›
As the coronavirus has caused the market to decline precipitously starting in February, 2020, many leveraged exchange-traded funds (ETFs), inverse ETFs, and exchange-traded notes (ETNs) have stopped trading, causing massive losses for investors.
An exchange traded fund (ETF) is a security that tracks an underlying index, such as the S&P 500, by holding the same securities as the index. Traditional ETFs track their indexes on a one-to-one basis, so that if the index increases by 1%, the ETF also increases by 1%. Continue reading ›
On May 1, 2018, FINRA Department of Enforcement entered into a settlement via Acceptance, Waiver, and Consent (AWC) with Respondent Laidlaw & Company. Without admitting or denying any wrongful acts, Laidlaw consented to a public censure by FINRA, the imposition of a $25,000 fine, as well as agreeing to give FINRA a written statement saying that systems mentioned in the AWC are designed to achieve compliance with “applicable securities laws, regulations, and rules.
FINRA Enforcement alleged that from April 2014 through December 2015, Laidlaw did not establish and maintain a supervisory system and written supervisory procedures (WSPs) designed to ensure that recommendations of leveraged and inverse exchange traded funds (Non-Traditional ETFs) complied with applicable securities laws and FINRA rules.
Non-Traditional ETFs are risky financial products because they are designed to return a multiple of an underlying benchmark or index over the course of a trading session. They are not intended to be held for more than a single trading session. FINRA Regulatory Notice 009-31 states “The performance of Non-Traditional ETFs over periods of time longer than a single trading session can differ significantly from the performance of their underlying or benchmark during the same period of time.”
Silver Law Group filed a claim against Arete Wealth Management, LLC alleging Arete’s broker recommended numerous unsuitable non-traded REITs and leveraged ETNs and ETFs to our elderly client.
According to the FINRA arbitration complaint, the elderly Claimant entrusted the entirety of her retirement portfolio to Arete Wealth Management and its broker. The broker proceeded to recommend the senior Claimant invest approximately half a million dollars in various illiquid, non-traded REITs. Among other non-traded REITs, the Arete Wealth Management broker recommended the Claimant invest in American Finance Trust, Hospitality Investors Trust, benefit Partners Realty Trust, and FS Energy and Power Fund, according to the FINRA arbitration complaint.
In addition to Arete Wealth Management’s unsuitable recommendations to invest in non-traded REITs, the Arete Wealth Management broker also invested the elderly Claimant’s brokerage account in risky investments such as leveraged ETFs and ETNs, according to the securities arbitration claim. These leveraged ETFs and ETNs are typically meant to be held for no more than one day. The FINRA arbitration complaint alleges the Arete Wealth Management broker held them for far longer than one day – in some cases months. Claimant, according to the securities arbitration claim, lost a significant amount of money in her Arete Wealth Management brokerage accounts.
How the company has violated or been accused of violating FINRA regulationsIt is always important for investors to have a good understanding of the financial professionals they work with. Before handing over money to anyone, brokers should be vetted properly. This is why the Financial Industry Regulatory Authority (FINRA) created its BrokerCheck reports.
Not only do these provide good information on where brokers are licensed and their work histories, but they also reveal customer disputes, discharges, and alleged improper activity. But these reports don’t just cover brokers – they also include their member firms.
These four brokers have been accused of numerous infractionsNational Securities Corporation has been operating for decades and has offices and brokers all over the U.S. Unfortunately, however, a significant percentage of their brokers have been involved in numerous customer complaints. Here are just a few examples of how National Securities employees have allegedly violated FINRA rules:
According to some reports, nearly 1/3 of National Securities brokers have had regulatory issues, legal disputes, or personal financial problems that have been disclosed to investorsNational Securities Corporation is one of the oldest financial firms in the U.S., dating back over 70 years. Its the main office is in Seattle, Washington, but the company has licenses to operate in every state in the country, as well as the District of Columbia, Puerto Rico, and the Virgin Islands.
National Securities Corporation is registered with the SEC and three self-regulatory organizations: Nasdaq, Cboe BZX Exchanged, Inc., and the Financial Industry Regulatory Authority (FINRA) – and it is with the latter agency that the company has come under intense scrutiny over the last couple of decades.
The elder financial fraud allegations reportedly cost elderly investors over $1M of retirement savingsOnce a prominent Methodist pastor in Houston, Texas, Kirbyjon Caldwell is now charged by the SEC with numerous counts of money laundering and wire fraud. The charges are directly related to a scheme Caldwell and his partner, Gregory Alan Smith – a self-proclaimed financial advisor who was also charged – allegedly used to defraud elderly investors by selling them an interest in defunct, pre-Revolutionary Chinese bonds.
It is alleged that in 2013 and 2014, Caldwell and Smith singled out vulnerable investors to invest in bonds that had no more value than being collectible memorabilia – promising instead that they were worth millions.
Elder financial fraud continues to be a lucrative scheme in America, which is why seniors and their loved ones always need to keep their guard up. We have previously discussed how to spot fraud and what some financial institutions are doing to prevent it, and this piece serves as a guide on what to do about the fraud that has occurred.
Victims, their family members, or caregivers should follow these steps to help limit the damage:
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