Salas Wang LLC is launching an investigation into First American Securities Inc. According to a recent Acceptance Waiver and Consent (AWC) with FINRA:
"First American allowed its representatives to recommend and sell Non-Traditional ETFs to customers from June 16, 2011 through December 31, 2012 without reasonably supervising this activity."
What Are Non-Traditional ETFs?
According to a FINRA Notice to Members (NTM) referenced in the First American AWC:
"Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track or both are growing in number and popularity. While such products may be useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis. Due to the effects of compounding, their performance over longer periods of time can differ significantly from their stated daily objective. Therefore, inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets."
How to Recover Your Losses
If you lost money investing in ETFs recommended by First American Securities, you may be able to recover your losses through FINRA arbitration or securities litigation. Brokerage firms have a legal duty to properly supervise their representatives and ensure that all investment recommendations are suitable for each customer.
Please contact Salas Wang LLC at 312.803.4963 or via the contact form for a free, no-obligation portfolio review.