The Financial Industry Regulatory Authority (FINRA), censured and fined CFD Investments $30,000 for allegedly failing to establish, maintain and enforce a reasonable supervisory system designed to ensure the review of its representatives’ sales of leveraged and inverse exchange-traded funds (non-traditional ETFs). FINRA found that CFD allegedly failed to supervise the sales of non-traditional ETFs, in that firm representatives sold non-traditional ETFs totaling $2 million to their clients, in 150 transactions. The firm did not have written procedures in place to address the risks associated with the non-traditional ETFs, and did not provide formal training to the reps involved in selling the products to clients. ETFs can be highly risky and illiquid investments that are not suitable for every client.
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