Exchange-Traded Notes

ETF Investor Loss Lawyer: Know When You Need Contact One

Published on: October 25, 2022 | by Shepherd Smith Edwards & Kantas, LLP

Should You Call an ETF Investor Loss Lawyer You Suffered Investor Losses in Ark Innovation ETF

Cetera and Other Broker-Dealers Now Facing ETF Investor Loss Claims From Customers

Many investors of the Ark Innovation Exchange-Traded Fund (ARKK) have been blindsided by their losses. According to sources, the ETF has lost more than 55% year-to-date and has seriously underperformed in the broad market. This is a complex structured note that has proven to be incredibly risky and volatile. It is also non-diversified, with nearly 50% of its total assets invested in just 10 companies.

UBS Financial Services Settles SEC Charges Over Exchange-Traded Products Compliance Lapses for $8M

Published on: July 26, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Customers Were Allegedly Unsuitably Sold Complex Exchange-Traded Products

UBS Financial Services (UBS) has agreed to a censure and will pay an $8M fine in the Securities and Exchange Commission’s (SEC) civil case accusing the brokerage firm of failing to properly supervise its brokers.

UBS financial advisors sold complex exchange-traded products (ETPs) without fully comprehending all of the risks involved. The SEC has also ordered the firm to pay disgorgement plus interest of almost $113K.

Global Investment Advisory Services’ Felipe Vargas is Named in Customer’s $1.3M Barclays Bank iPath Series B S & P 500 Short Term Futures ETN Claim

Published on: November 13, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Investor Contends Insigneo Securities Broker Unsuitably Handled Account

A former customer of Felipe Henao Vargas, an Insigneo Securities stockbroker, is pursuing a Financial Industry Regulatory Authority (FINRA) arbitration claim against the brokerage firm for $1.3M in damages related to the iPath Series B S & P 500 Short Term Futures ETN (VXX). Henao is also a registered investment advisor with Global Investor Advisory Services, LLC in Miami, Florida.

The investor said that Henao had placed a short-term trade for 20,000 of the Barclays exchange-traded note (ETN) in late February 2020 in the investor’s account and then made another trade a few weeks later to cover the short. The claimant reportedly wrote an email expressing concerns over the brokerage account’s performance, which had depreciated in value, and Henao’s lack of communication.

Some Investors Lose Big As ETFs, ETNs & Other Structured Products Fail During COVID-19

Published on: June 15, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Structured Product Losses Stun Retail Investors Who Should Never Have Been Told By Brokers To Buy Them

The recent market turbulence caused by the coronavirus has caused many investors’ portfolios to suffer huge losses, and nowhere is this more evident as the losses suffered by those who invested heavily in structured products, including exchange-traded notes (ETNs) and exchange-traded funds (ETFs).

And while yes, no one could have anticipated COVID-19 battering the economy and the markets, for many investors, they likely shouldn’t have and wouldn’t have gotten involved in these complex investments were it not for the recommendation of their stockbroker.

Market Volatility Caused by COVID-19 Negatively Impacts Leveraged ETNs & Inverse ETPs

Published on: April 13, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Inverse and Leveraged ETNs and ETFs Are Shuttering

As the novel coronavirus (COVID-19) continues to adversely affect the markets and cause crude oil prices to drop, the number of inverse and leveraged exchange-traded notes (ETNs), exchange-traded funds (ETFs) and exchange-traded products (ETPs) involving crude oil that have been forced to close, delist, or automatically accelerate continues to grow and this has caused more losses for investors.

Right now, our broker fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are working with leveraged and inverse ETF and ETP investors throughout the US to help them explore their legal options.

Shepherd Smith Edwards and Kantas Investigates Claims Involving Leveraged UBS ETRACS ETNs After COVID-19 Market Crash Causes Investor Losses

Published on: April 1, 2020 | by Shepherd Smith Edwards & Kantas, LLP

UBS To Offer Redemptions to ETRACS ETN Investors After Coronavirus-Spurred Crash

If you are an investor who was sold UBS ETRACS exchange-traded notes (ETNs), please contact our investor lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) today. ETRACS ETNs are complex and risky investments and they are not suitable for every investor.

UBS recently announced that it was offering mandatory redemptions for certain ETRACS ETNs while freezing trading of others after the market crashes spurred by the novel coronavirus (COVID-19) pandemic. UBS ETRACS ETN investors have lost a lot of money.

California Extends Sanctions Imposed Against Wells Fargo Following More Bad Practice Disclosures

Published on: October 23, 2017 | by Shepherd Smith Edwards & Kantas, LLP

California Treasurer John Chiang announced this week that the state has decided to extend the sanctions it imposed against Wells Fargo & Co. (WFC) for one more year. The bank is barred from doing business with California in the wake of the sales practice scandal involving the set up of at least two million unauthorized credit card and bank accounts. Wells Fargo agreed to pay $185M to regulators to resolve related charges.

As the country’s largest municipal debt issuer, California oversees a $75B investment portfolio. Its sanctions include suspending the state’s investments in Wells Fargo Securities, barring the bank from being used as a brokerage firm to buy investments, and prohibiting it from serving as bond underwriter whenever Chiang is authorized to appoint said underwriter.

When explaining why he sought to extend the state’s sanctions, Chiang pointed to recent disclosures, including that Wells Fargo overcharged veterans in a federal mortgage-refinancing program and, in another program, made loan borrowers pay for unnecessary insurance. The state treasurer sent a letter to Wells Fargo’s board and its Chief Executive Tim Sloan noting that a number of demands have to be fulfilled before he will lift the sanctions.

Wells Fargo Brokerage Firms Ordered to Pay $3.4M Over Unsuitable Exchange-Traded Product Recommendations

Published on: October 16, 2017 | by Shepherd Smith Edwards & Kantas, LLP

The Financial Industry Regulatory Authority said that Wells Fargo Advisors Financial Network and Wells Fargo Clearing Services LLC must pay over $3.4M in restitution to customers who were impacted by unsuitable recommendations involving exchange-traded products and the supervisory failures involved. By settling, Wells Fargo (WFC) is not denying or admitting to the regulator’s charges.

According to FINRA, between 7/1/200 and 5/1/2012, there were registered representatives at Wells Fargo (WFC) who recommended these volatility-linked ETPs without fully comprehending the investments’ features and risks. The self-regulatory organization also found that the broker-dealer did not put into place a supervisory system that was reasonable enough to properly supervise the ETP sales during the period at issue.

The regulator said that the brokers did not have reasonable grounds for recommending these ETPs to customers whose risk profiles and investment goals were considered moderate or conservative. The representatives are accused of making inappropriate recommendations about when to leave these positions in a “timely manner.”

Ex-Broker Ordered to Pay $550K For Bilking Modest Income Investors in ETN/ETF Fraud Had Previous Unsuitable Investment Claims Against Him

Published on: October 5, 2017 | by Shepherd Smith Edwards & Kantas, LLP

The US Securities and Exchange Commission has secured a final judgment by default in its broker fraud case against Demitrios Hallas. The former broker was charged by the regulator in April for allegedly trading unsuitable investment products in five customers’ accounts. The customers were unsophisticated investors with not much, if any, experience in investing. Their net worth and income levels were modest enough that risky investments were not a good fit for their portfolios.

According to the regulator’s complaint, in a period of a little over a year, Hallas traded 179 daily leveraged exchange traded funds and exchange traded notes in these accounts. (Both ETFs and ETNs products are considered high-risk, volatile, and only suitable for sophisticated investors.)

The SEC said that Hallas had no reasonable grounds for recommending these investments to customers. Meantime, the latter were charged fees and commissions of about $128K. The net loss sustained over all the positions was about $170K.

North Carolina Retiree Couple Files FINRA Arbitration Case Against Morgan Stanley Over Energy Investment

Published on: March 8, 2016 | by Shepherd Smith Edwards & Kantas, LLP

Two North Carolina investors have filed an arbitration claim with FINRA against Morgan Stanley (MS) over unsuitable investments involving the financial firm’s Cushing MLP High Income Exchange Traded Note. The married couple, who are retirees in their sixties, are accusing the brokerage firm of:

· Common law fraud

· Negligence

· Breach of fiduciary duty

· Negligent supervision

· Failure to adequately disclose the risks

In a phone interview with InvestmentNews, the claimants said that they have lost over $100K. According to the couple, a Morgan Stanley broker invested about $150,000 of their money in the Morgan Stanley Cushing MLP High Income ETN, which is an exchange traded note connected to master limited partnerships with shipping and energy assets. Their legal team said that the couple did not understand the extent of the risks involved in that they could potentially lose their principal. This was a loss they could not afford. Instead, the claimants were purportedly told that their investment would make them money.

The Cushing MLP High Income Exchange Traded Note seeks to give investors cash upon maturity or early repurchase, as well as variable coupon payments every quarter (depending on how the underlying index, performs). The claimants’ broker fraud lawyers believe that Morgan Stanley recommended the exchange traded note to investors who were seeking to make money but may not have understood or been fully apprised of all the risks.