Published On: December 8, 2015

Stoltmann Law Offices is investigating allegations made against Summit Brokerage Services, a Boca Raton, Florida based securities brokerage firm. Recently, the Financial Industry Regulatory Authority (FINRA) brought a regulatory action against Summit, with numerous allegations that the firm failed to supervise the sale of non-traditional exchange-traded funds (ETFs) from June 2009 until December 2010. The ETFs included inverse and leveraged ETFs. The firm agreed to pay a fine of $250,000 and restitution of $9,556. ETFs are used to track and replicate the performance of an index. Leveraged ETFs try to replicate the performance of a particular index, but attempt to do so by doubling or even tripling the index. Inverse ETFs try to replicate the opposite of a particular index and can be popular tools for intra-day trading for investors. The ETFs are designed for day-trading, but often financial advisors recommend holding them for weeks or months. They are often misused in the industry. They can be very risky investments because of it. A broker’s duty is to research the investment before recommending it to a client. He also has a duty to take into account a client’s age, net worth, investment portfolio, and risk tolerance before recommending a security. If he does not, his brokerage firm may be liable for investment losses. Please call us if you experienced a similar situation with your broker or with Summit Brokerage Services. We may be able to help you bring a claim against them to recover your investment losses.

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