Concerned about investment losses in Morgan Stanley single-inverse ETF Investments?
Have you suffered losses investing in Morgan Stanley single-inverse ETF investments? If so, The White Law Group may be able to help you recover your losses through FINRA Arbitration.
Yesterday the SEC announced that Morgan Stanley Smith Barney will pay $8 million penalty and admit wrongdoing to settle charges related to single inverse ETF investments it recommended to advisory clients.
According to the SEC, Morgan Stanley did not adequately implement its policies and procedures to ensure that clients understood the risks involved with purchasing inverse ETFs. The SEC states Morgan Stanley failed to obtain signed client disclosures from several hundred clients.
The disclosure stated that single inverse ETFs are typically unsuitable for investors planning to hold them longer than one trading session unless used as part of a trading or hedging strategy. Morgan Stanley allegedly solicited clients to purchase single inverse ETFs in retirement and other accounts. Unfortunately for investors, the securities were held long-term, and many of the clients experienced losses.
Among other compliance failures, Morgan Stanley did not monitor the single-inverse ETF positions on an ongoing basis and did not ensure that certain financial advisers completed single inverse ETF training.
Risks of Leveraged and Inverse ETFs
Leveraged and inverse ETFs are designed to amplify short-term returns by using debt and derivatives and are considered more suitable for professional traders than for long-term retail investors or anyone who cannot tolerate a high-risk portfolio. Many investors do not understand the magnitude of the risks of leveraged and inverse ETFs and believe that they are more akin to a normal ETF — which is designed to simply mirror the performance of an underlying index, like the S&P.
FINRA and other regulators began issuing warnings about the sale of leveraged and inverse ETFs in 2009. There were concerns that securities brokers were selling them to buy-and-hold investors – a strategy likely to cause heavy losses due to the enormous fluctuations that are experienced by these extremely short term investments.
The White Law Group continues to investigate FINRA arbitration claims involving leveraged and inverse ETFs. The brokerage firms and financial professionals that sold these products may have liability for failure to adequately disclose the risks of these products.
If you suffered losses in a leveraged or single-inverse exchange-traded fund and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, visit https://whitesecuritieslaw.com.
Tags: broker churning, Chicago broker fraud attorney, Chicago churning attorney, Chicago FINRA attorney, Chicago investment fraud attorney, Chicago securities attorney, Chicago securities lawyer, churning turnover ratio, Excessive brokerage fees, Excessive buying and selling securities, excessive financial advisor commissions, excessive financial advisor fees, Excessive stockbroker commissions, Excessive stockbroker fees, financial advisor account churning, financial advisor Churn & burn, financial advisor churning attorney, financial advisor churning lawyer, financial advisor Excessive commissions, Financial advisor Excessive fees, financial advisor Excessive transactions, Financial advisor frequent trades, Florida churning attorney, Florida churning lawyer, Frequent broker commissions, Frequent brokerage fees, how much trading is too much, Illinois churning attorney, Illinois churning lawyer, investment advisor account churning, investment advisor churn and burn, investment advisor excessive commissions, investment advisor excessive fees, investment advisor excessive transactions, investment advisor frequent trades, leverage ETFs, Morgan Stanley single inverse etfs, Morgan Stanley single-inverse ETF investments disclosures, Morgan Stanley single-inverse ETF investments FINRA, Morgan Stanley single-inverse ETF investments investigation, Morgan Stanley single-inverse ETF investments lawsuit, Morgan Stanley single-inverse ETF investments losses, Morgan Stanley single-inverse ETF investments SEC penalty, Morgan Stanley single-inverse ETF investments securities fraud attorney, Morgan Stanley single-inverse ETF investments settlement, single inverse ETFs, single-inverse exchange traded funds, stockbroker Account churning, stockbroker churning and burn, stockbroker churning attorney, stockbroker churning lawyer, stockbroker excessive commissions, stockbroker excessive fees, stockbroker excessive transactions, Stockbroker frequent trades, Vero Beach investment fraud attorney, Vero Beach securities attorney, Vero Beach securities lawyer, what is churning, what is excessive trading, what turnover ratio is considered churning Last modified: March 8, 2017