inverse exchange traded funds

Aegis Capital Corp. Ordered to Pay Nearly $2.7 Million for Supervisory Failures Related to Rampant Excessive and Unsuitable Trading

Published on: November 9, 2021 | by Iorio Altamirano

On November 8, 2021, the Financial Industry Regulatory Authority (“FINRA”) and Aegis Capital Corp. (“Aegis Capital”) entered into Letter of Acceptance, Waiver, and Consent No. 2016051704305 (the “AWC”). After conducting an investigation, FINRA alleged in the AWC that from July 2014 through December 2018, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 as it pertains to excessive trading. As a result, Aegis Capital failed to identify trading in hundreds of customer accounts that were potentially excessive and unsuitable, including trading conducted by eight Aegis Capital registered representatives in the firm’s Melville and Wall Street branches whose trading in the accounts of 31 firm customers resulted in an average annualized cost-to-equity ratio (or break-even point) of 71.6%, an average annualized turnover rate of 34.9, combined customer costs (including commissions, markups or markdowns, margin interest, and fees) of more than $2.9 million, and cumulative losses of $4.6 million.

Additionally, the FINRA AWC alleged from July 2014 to June 2019, Aegis Capital failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with the suitability requirements of FINRA Rule 2111 when selling leveraged, inverse, and inverse-leveraged Exchange-Traded Funds (Non-Traditional ETFs) to retail customers. As a result, Aegis Capital failed to identify customers who purchased and held Non-Traditional ETFs for extended periods of time or whose purchase was inconsistent with their recorded investment objective, risk tolerance, or finances.

Customers of Aegis Capital, including customers that have been notified that they may be receiving restitution, should consult with a securities arbitration law firm. If you or a loved one were a customer of Aegis Capital, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

Iorio Altamirano LLP Investigates Sanctuary Securities, Inc. (Formerly David A. Noyes & Company) Over Inverse and Leveraged Exchange-Traded Funds Supervisory Failures

Published on: July 7, 2021 | by Iorio Altamirano

Iorio Altamirano LLP is investigating claims on behalf of Sanctuary Securities, Inc. (formerly David A. Noyes & Company) customers who invested in inverse and leveraged exchanged-traded funds.

On July 1, 2021, Sanctuary Securities, Inc. and the Financial Industry Regulatory Authority (“FINRA”) entered into a Letter of Acceptance, Waiver, and Consent No. 20190606942201 (“AWC”) over allegations that between January 2014 and December 2018, Sanctuary Securities, Inc. failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA Rule 2111 in relation to the solicited sales of inverse and leveraged exchange-traded funds (collectively “Non-Traditional ETFs”) in that the firm’s supervisory system was not sufficiently tailored to address the unique features and risks of these products.

Relatedly, on July 2, 2021, FINRA suspended former Sanctuary Securities, Inc. financial advisor Stuart Pearl from the securities industry for three months. Click on the following link to read more: Stu Pearl, Former David A. Noyes & Company Broker, Suspended for Making Unsuitable Non-Traditional ETF Investment Recommendations – Indianapolis, IN

Stu Pearl, Former David A. Noyes & Company Broker, Suspended for Making Unsuitable Non-Traditional ETF Investment Recommendations – Indianapolis, IN

Published on: July 2, 2021 | by Iorio Altamirano

The Financial Industry Regulatory Authority (“FINRA”) has suspended financial advisor Stuart Pearl from the securities industry for three months. Mr. Pearl consented to the suspension after FINRA alleged that from March 2017 and August 2018, while associated with David A. Noyes & Company (now Sanctuary Securities, Inc.) in Indianapolis, Indiana, he recommended the purchase of leveraged and inverse exchange-traded funds (collectively “Non-Traditional ETFs”) to four customers without having a sufficient understanding of the risks and features associated with these products and thereby failing to have a reasonable basis for making these recommendations. In addition to the suspension, Mr. Pearl is also subject to a $5,000 deferred fine.

Sanctuary Securities, Inc. became a member of FINRA in December 1939 and was known as David A. Noyes & Company until March 5, 2020. The firm has 35 branch offices and approximately registered representatives. Iorio Altamirano LLP is also Sanctuary Securities, Inc. over inverse and leveraged exchange-traded funds supervisory failures. To read more about the investigation, click on the following link: Iorio Altamirano LLP Investigates Sanctuary Securities, Inc. (Formerly David A. Noyes & Company) Over Inverse and Leveraged Exchange-Traded Funds Supervisory Failures

Customers of Mr. Pearl or Sanctuary Securities, Inc./David A. Noyes & Company should consult with a securities arbitration law firm. If you or a loved one were a customer of Stuart Pearl, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation.