Watch Out United States ETN Investors—Exchange Traded Notes Can Be Extremely Volatile!

While the popularity of exchange traded notes (“ETNs”) has surged, ETNs can be extremely volatile, and investors run the risk of losing their entire investment. ETNs reportedly hold $17.4 billion in assets, up from under $5 billion five years ago. Exchange traded notes issued by Credit Suisse have recently traded at prices that were far above and below the true value of the ETN (See “2 ETNs’ manic swings point out peril of use,” by Jason Kephart, InvestmentNews). The true value of an exchange traded note (or any fund) is the net value of the tracked (or held) index or other asset. But when an asset gets hot, like ETNs, it can get overbought, and when something happens to dry up demand, it can get oversold. All of this can happen fast enough to make your head spin.

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FINRA Will File Enforcement Actions for Improper Sales of ETFs and ETNs Throughout Florida and the United States!

The Financial Industry Regulatory Authority (FINRA) announced plans to file enforcement actions against certain brokerages in connection with unsuitable sales of leveraged and inverse leveraged exchange-traded funds (ETFs), as well as for failure to train their brokers who sell them (see Reuters article by Suzanne Barlyn and Jessica Toonkel entitled “FINRA to bring cases over leveraged, inverse ETFs”). The article cites former FINRA Enforcement Chief Bradley Bennett as the source of this information, and notes that he refused to identify the broker-dealers that FINRA plans to sue. Bennett reportedly told lawyers at a Practising Law Institute (PLI) seminar in New York that the enforcement actions will “make statements” about how broker-dealers should ensure that registered representatives are properly trained about these complex products and the types of customers for whom they may or may not be suitable.

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Watch Out Inverse ETF and ETN United States and International Investors!

The SEC and FINRA are finally stepping up to regulate nontraditional ETFs and ETNs and to ensure that these complicated products are not sold to unsophisticated investors. Citigroup Global Markets Inc., Morgan Stanley, UBS Financial Services Inc. and Wells Fargo agreed to pay $9.1 million to settle allegations that they sold leveraged and inverse exchange-traded funds to clients who had no business investing in the complex instruments.

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Watch Out Florida Fixed Income Investors—Exchange Traded Notes Are Dangerous!

Investor advocates are saying that more should be done to protect retail investors in Exchange-Traded Notes (ETNs). There is growing concern that with the rising popularity of ETNs, investors and financial advisers are getting into these products without fully understanding them or the risks involved. ETN’s are bank-issued debt securities. They were first brought to market six years ago to allow sophisticated investors to place bets on different parts of the market. Recently, however, retail investors have also started trading ETNs to gain access to certain market segments, such as those involving gold, silver, or natural gas. ETN offerings have grown in number over the past few years, with 212 ETNs now found on exchanges.

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Watch Out Investors: FINRA Alerts Exchange Traded Note (ETN) Investors

The Financial Industry Regulatory Authority (FINRA), the self-regulatory arm of the U.S. securities brokerage industry, has issued an Investor Alert regarding the features and risks of exchange-traded notes.  FINRA and the Securities and Exchange Commission have raised concerns about disclosures and sales practices involving exchange-traded notes, as well as other complex structured products. Former FINRA Enforcement Chief Brad Bennett said that FINRA will bring enforcement actions against firms for unsuitable recommendations of exchange-traded notes. FINRA issued Regulatory Notice 12-03 to provide broker-dealers with guidance on supervising the sale of complex products that are difficult for retail investors and brokers to understand.  The FINRA alert warns that exchange-traded notes often have little or no performance history, their indexes and investment strategies can be quite complex, their returns can be volatile, and the price computed by the issuer can vary significantly from the price in the secondary market.  Firms are required to ensure that their marketing materials are fair and include accurate disclosures of all material risks; that registered representatives are properly trained to understand the risks of exchange-traded notes; and that supervisors are able to determine whether or not the sales meet suitability requirements.

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Investors Nationwide Beware – Exchange-Traded Notes Carry Unpleasant Surprises!

The Financial Industry Regulatory Authority (FINRA) has recently raised concerns about disclosure and sales practices involving Exchange Traded Notes (ETNs).  Of primary concern is the number of clients not suited for the risks associated with ETNs, but who still were recommended ETNs by their brokers.  As a result, FINRA has issued a regulatory notice to provide broker-dealers with guidance on how to oversee the sale of complex products such as ETNs that are difficult for retail investors and brokers to understand.   Firms are now required to make sure that their marketing materials fairly disclose risks, and that supervisors and registered representatives are trained to understand the risks associated with ETNs.  FINRA also warned that ETNs have little or no performance history, their investment indexes and investment strategies are complex, their returns have the potential to be volatile, and the price given by the issuer can vary significantly from the price on the secondary market.

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Did Eric Weschke of Kalos Capital Sell You Any GPB Fund?

Let Us Help You Recover Your GPB Investment Losses! Eric Peter Weschke has been employed by Kalos Capital, Inc. and Weschke Wealth Management in Setauket, New York since 2011.  During his illustrious securities industry career as a salesperson he has managed to be the subject of two regulatory complaints and fourteen customer complaints. Ohio denied him registration in the state because it “determined that Weschke was not of good business repute.”  Nine of those arbitrations were settled in the investors’ favor, two were denied and three remain pending.  We believe all of the pending complaints relate to Mr. Weschke’s private offer and sale of GPB Capital Holdings sponsored limited partnership interests. We are attorneys offering to help GPB investors who made private placement investments in the following limited partnerships offered and sold by Mr. Weschke during his employment with Kalos Capital, Inc.; that is, help them to rescind their GPB investment and/or recover their GPB investment losses: GPB Automotive Portfolio, LP GPB Cold Storage LP GPB Holdings, LP GPB Holdings II, LP GPB Holdings III, LP GPB Holdings Qualified, LP GPB NYC Development, LP GPB Waste Management Fund, LP

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Did Former Triad Advisors Broker Michael Sievert Sell You Any GPB Fund?

Let Us Help You Recover Your GPB Investment Losses! Michael Sievert is currently employed by Arkadios Capital in Jacksonville, Florida. But during the period 2012 though 2018 he was registered with Triad Advisors, LLC in the same city. His securities industry career as a salesperson is not unblemished; he has been the subject of two customer complaints, both of which are still pending. We believe both of these complaints relate to Mr. Sievert’s private offer and sale of GPB Capital Holdings sponsored limited partnership interests. We are attorneys offering to help GPB investors who made private placement investments in the following limited partnerships offered and sold by Mr. Sievert during  his employment with Triad Advisors; that is, help them to rescind their GPB investment and/or recover their GPB investment losses: GPB Automotive Portfolio, LP GPB Cold Storage LP GPB Holdings, LP GPB Holdings II, LP GPB Holdings III, LP GPB Holdings Qualified, LP GPB NYC Development, LP GPB Waste Management Fund, LP

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Did Dustin Shafer of Newbridge Securities and formerly with Money Concepts Capital Sell You Any GPB Fund?

Let Us Help You Recover Your GPB Investment Losses! Dustin Shafer is currently employed by Newbridge Securities Corporation in Springfield, Illinois. During the period 2008 through 2019 he was registered with Money Concepts Capital Corp. in the same city. During Mr. Shafer’s securities industry career as a salesperson he has been the subject of seven customer complaints. His BrokerCheck Report also discloses six Judgement/Liens. We believe the two pending complaints relate to Mr. Shafer’s private offer and sale of GPB Capital Holdings sponsored limited partnership interests while his was associated with Money Concepts Capital. We are attorneys offering to help GPB investors who made private placement investments in the following limited partnerships offered and sold by Mr. Shafer during his employment with Money Concepts Capital Corp. ; that is, help them to rescind their GPB investment and/or recover their GPB investment losses: GPB Automotive Portfolio, LP GPB Cold Storage LP GPB Holdings, LP GPB Holdings II, LP GPB Holdings III, LP GPB Holdings Qualified, LP GPB NYC Development, LP GPB Waste Management Fund, LP

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