DKR Files FINRA Arbitration Claim against Newbridge Securities
Law Firm Dimond Kaplan & Rothstein, P.A. Aims to Recover ETF Losses
The securities arbitration law firm Dimond Kaplan & Rothstein, P.A. (DKR) has filed a FINRA arbitration claim against Boca Raton, Florida-based Newbridge Securities Corporation on behalf of an Austin, Texas couple who lost a large portion of their life savings in risky exchange-traded funds (ETFs).
Newbridge Broker Recently Barred from Securities Industry
DKR’s clients allege that Newbridge Securities broker Matt Neas recommended that they place nearly the entirety of their savings in unsuitably risky ETFs, including leveraged ETFs, short ETFs, and ETFs tied to the VIX (the S&P volatility index).
Neas has been the subject of numerous prior customer complaints and was recently permanently barred from working in the securities industry after he failed to cooperate with a FINRA investigation into his business practices.
Leveraged and Inverse ETFs Are Complex and Risky
The timing of the case happens to coincide with the recent stock-market volatility that caused significant losses in certain ETFs and exchange-traded notes (ETNs), including the Proshares Short VIX Short-Term Futures (SVXY) and Credit Suisse VelocityShares Daily Inverse VIX ST ETN (XIV).
Many ETFs are designed to be bought and held for only one trading session. When held for longer than that, the performance of the ETFs can deviate significantly from the performance of the ETFs’ benchmarks. Since many investors do not understand this aspect of ETFs and many brokers either do not understand it or fail to properly inform investors about the nature of the ETFs, many investors have lost money investing in ETFs.
Many Brokerage Firms Prohibit Leveraged and Inverse ETF Sales
Securities regulators have issued reminders to brokerage firms of the daily nature of ETFs and that leveraged and inverse ETFs are highly complex. Recently, there have been several FINRA regulatory cases involving FSC Securities, WFG Investments and Wells Fargo related to ETFs that required the firm’s to pay fines for improperly recommending ETFs to investors.
Due to the complexity of these securities, many Wall Street brokerage firms prohibit solicited sales of leveraged and inverse ETFs to retail customers. In this instance, Newbridge Securities appears to have ignored regulators’ warnings.
Have You Lost Money Investing with Matt Neas or Newbridge Securities?
If you lost money investing with Matt Neas or Newbridge Securities or think you may be the victim of stockbroker misconduct, contact an experienced securities fraud attorney today.
Call a Securities Fraud Attorney Today
If you are looking for a securities attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.