Brokers Allegedly Involved Were Also Harvest Group Wealth Management Investment Advisers
Massachusetts Secretary of the Commonwealth William Galvin has filed a complaint against Purshe Kaplan Sterling Investments (PKS Investments), accusing the broker-dealer of failing to supervise its financial advisors. These advisors who were dually registered through another financial firm allegedly sold exchange-traded funds (ETFs) that were unsuitable for customers.
This other firm was Waltham-based investment advisor Harvest Group Wealth Management. As a result, the state securities regulator contends that investors suffered $2.3M in losses.
Our exchange-traded fund (ETF) attorneys are speaking to investors who may have been unsuitably sold these products by a Purshe Kaplan Sterling Investments broker. Contact Shepherd Smith Edwards (SSEK Law Firm at investorlawyers.com) today and ask for your free, no-obligation case assessment.
Failure to Supervise & Unsuitability Involving Leveraged ETFs
PKS Investments works with ex-brokers who want to keep earning commissions even as they elect to become fee-based registered investment advisers.
According to Galvin’s complaint, from August 2017 to April 2020, the New York-based broker-dealer let these dually registered representatives make thousands of transactions involving leveraged ETFs without proper supervision.
These investments, such as ProShares Ultra S&P 500, ProShares Ultra QQQ, and others, were sold to investors who ended up holding them for longer than the one-day recommendation for this type of product.
Leveraged ETFs are tied to baskets of underlying investments, which can magnify their activities and lead to significant investment gains and losses. They are not suitable for many investors. As far back as 2009, the Financial Industry Regulatory Authority notified broker-dealers that these types of ETFs, if held for longer than a day, are not a good fit for retail customers.
Galvin said that Purshe Kaplan Sterling Investments did not review thousands of leveraged exchange-traded fund transactions that these dually registered advisors made in Massachusetts customers’ accounts.
The Harvest Group executed over 2,800 transactions in two leveraged ETFs involving over 340 client accounts. These products were held for days, weeks, months, even a year. The investors who held them for over a year suffered huge losses.
Now, the Massachusetts regulator wants restitution for investors, a censure, and an administrative fine.
Purshe Kaplan Sterling Investments Has Long History of Customer Disputes
This isn’t the first time PSK Investments has dealt with customer complaints or disputes. In April 2021, the brokerage firm was ordered by FINRA to pay a $1.6M settlement to over 50 customers. Since 2017, the firm has reportedly paid over $16M in damages to customers that suffered losses when working with one of the firm’s registered representatives.
Purshe Kaplan Sterling Investments is also one of the many firms that unsuitably sold GPB Capital Holdings private placements. Many investors have suffered significant losses in this $1.8B Ponzi scam.
Seasoned Exchange-Traded Fund Lawyers
SSEK Law Firm represents investors in pursuing damages over ETF losses that negligent brokerage firms unsuitably sold. Please call our team of experienced securities fraud lawyers at (800) 259-9010 today. You may have grounds for an arbitration claim.