SEC FINES BROKER-DEALER FOR UNSUITABLE SALES OF LEVERAGED ETNS -

In September 2018, the SEC fined a New York-based broker-dealer in connection with unsuitable sales of leveraged ETNs linked to the price of crude oil.

In this proceeding, the SEC determined that, for a period of approximately two years, the broker’s representatives that made recommendations about buying and holding these securities did not properly understand these products and their risks, and that the broker did not properly supervise these representatives. As a result, the broker’s retail investors lost more than 90% of their investments in the relevant ETNs.