Brokerage Firm CFD Investments, lnc. (CRD#: 25427), which is headquartered in Kokomo, Indiana, and has approximately 150 branch offices and 220 registered representatives, has been sanctioned by the Financial Industry Regulatory Authority (FINRA) in connection with alleged sales practice violations involving Non-Traditional ETFs. CFD allegedly failed to supervise brokers who made unsuitable recommendations of these investments between 2012 and 2014. According to FINRA, the Firm did not have adequate written supervisory procedures in place to address the unique features and risks associated with Non-Traditional ETFs and did not provide formal training to the representatives involved in selling the products to retail customers. FINRA further alleged that CFD did not have any exception reports or surveillance tools to monitor the accounts holding Non-Traditional ETFs.
Non-Traditional ETFs are designed to be short-term trading vehicles that achieve their stated objectives only over the course of one trading session. FINRA admonished its membership of this in FINRA Regulatory Notice 09-3, stating that Non-Traditional ETFs “are typically not suitable for retail investors who plan to hold them for more than one trading’ session, particularly in volatile markets.” Despite this warning, CFD allowed these investments to be held in customer accounts for an average of 300 days.
If you are a former customer of CFD Investments, and you have suffered investment losses, we may be able to help you recover some or all of your losses. We regularly evaluate and prosecute claims on behalf of investors who have suffered investment losses as a result of unsuitable investment recommendations. If you would like to discuss your claim with an experienced attorney who specializes in this area, call Daniel J. Broxup of Mika Meyers, PLC at (616) 632 8059.