Stanley, Mandel & Iola, L.L.P. and Wolf Haldenstein
The law firms of Stanley, Mandel & Iola, L.L.P., and Wolf Haldenstein Adler Freeman & Herz LLP are investigating potential claims on behalf of retail customers who purchased leveraged exchange-traded funds (ETFs) and leveraged inverse ETFs and held them in their brokerage accounts for longer than one day. ETFs are securities whose price tracks the performance of an underlying index, sector, or economy. ETF investors buy into a pool of securities and other assets, much like traditional mutual funds, that can be bought or sold through a broker-dealer like ordinary stocks. Leveraged ETFs and leveraged inverse ETFs are not intended to be held for more than one day. In June 2009, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 09-31, “Non-Traditional ETFs, FINRA Reminds Firms of Sales Practice Obligations Relating to Leveraged and Inverse Exchange-Traded Funds," reminding firms that “inverse and leveraged ETFs typically are not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets." Most leveraged ETFs and inverse leveraged ETFs were created by ProShares (part of the ProFunds Group), Direxion and Rydex/SGI. Broker-dealers who sold leveraged ETFs and inverse leveraged ETFs include Fidelity Funds, UBS Wealth Management Americas (a division of UBS AG), Ameriprise Financial, Edward Jones, LPL Financial Group, and Morgan Stanley Smith Barney. All of these firms have either stopped selling leveraged ETFs to retail customers, or severely restricted their sales, since FINRA issued Regulatory Notice 09-31. If you have information about leveraged ETFs or leveraged inverse ETFs, or would like additional information about our investigation, please call 800.443.8260 or email info@etfcomplaints.com.
Stanley, Mandel & Iola, L.L.P. Wolf Haldenstein Adler Freeman & Herz LLP
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