May 9, 2014 --- Hardee, Martin & Donahoe is actively investigating potential legal claims and loss recovery options against brokerage firm Edward D. Jones & Co for actions of some of its registered representatives in making unsuitable recommendations to customers to purchase nontraditional exchange-traded funds without engaging in reasonable diligence about these products.
On January 9, 2014, Edward Jones entered into a Letter of Acceptance, Waiver and Consent (“AWC”) with FINRA (the “Financial Industry Regulatory Authority”) for the purpose settling allegations that it had violated rules by making unsuitable recommendations to customers and failing to establish and maintain a reasonable system of supervision over its representatives. Edward Jones was fined $200,000. See FINRA Case # #2010022283702.
Exchange-traded funds, more commonly known as “ETFs” are typically registered unit investment trusts or open-ended investment companies whose shares represent an interest in a portfolio that tracks an underlying benchmark or index such as the S & P 500. Shares of ETFs are typically listed on national securities exchanges for purchase and sale. The difference between traditional ETFs and nontraditional ETFs is that nontraditional ETFs seek to return either (a) a multiple of the underlying benchmark or index; (b) the inverse of the underlying benchmark or index; or (c) both. Additionally, nontraditional ETFs are designed to achieve their intended objective over the course of only one trading session in a day. This is why nontraditional ETFs are typically not suitable for retail investors, who plan to hold them for more than 1 trading session. Nontraditional ETFs are also not suitable for investors who do not desire to take aggressive risk with their investment account.
For more information, Rebecca Griffey with the law firm of Hardee, Martin & Donahoe, P.A. can be contacted at 1-800-441-3193 or at email@example.com for a FREE consultation.
If you are a client of Edward Jones and have suffered losses resulting from a nontraditional ETF or if you have suffered losses as a result of a nontraditional ETF sold to you by any other brokerage firm, you are encouraged to seek legal advice regarding potential claims for recovery.