In most instances the leveraged ETF is grossly unsuitable for retails clients at firms like H&R Block, Wells Fargo, UBS or Ameriprise. The leverage in these products creates risks that most investors simply cant be exposed to. Similar to margin, the leverage works wonderfully when the market is going up but when the market crashes, the impact is often cataclysmic.
Richard Ketchum, Chairman of the Financial Regulatory Authority said in a speech last week that additional regulations may be needed on new products such as leveraged ETFs. FINRA has warned brokerage firms, including last summer, about selling leveraged ETFs to retail investors. FINRA has disclosed they are looking closely at the sales practices of brokerage firms selling leveraged ETFs.
If you'd like a free review by an attorney with respect to whether Direxion Russia Bull 3X Leverage investment losses can be recovered through the FINRA arbitration or class action process, please call our investment fraud lawyers in Chicago, Illinois