Jack McBride, a financial broker currently registered at Wunderlich Securities Inc., was under investigation by FINRA over allegations of soliciting prohibited securities up until the FINRA claims were settled this October.
McBride (CRD# 2517946) has been with Wunderlich for the past three years. Before that, he was registered with Ameriprise for four years.
According to FINRA, McBride committed several violations concerning customer accounts while at Ameriprise, including settling a customer complaint without notifying his firm, sending emails with inflated account values, and marking non-traditional Exchange Traded Products (non-traditional ETFs) order tickets as unsolicited, when they should have been marked as solicited.
FINRA stated that,
“It is a violation of FINRA Rule 2010 for a registered representative to settle a customer complaint without his firm's knowledge or approval. The Firm's policies similarly prohibited representatives from engaging in settlements and refunding clients without the Firm's knowledge.”
In September, Jack McBride agreed to accept and consent to the allegations of the FINRA investigation along with fines and a suspension.
Two previously filed customer arbitrations relating to McBride’s misconduct have been settled. Both of those complaints concerned the sale of ETFs.
Risks of Exchange Traded Funds (ETFs)
ETFs are mutual funds that are traded in the same manner as traditional stocks. They are often marketed as simple for the common investor to understand, but have come under scrutiny for being incredibly complex in practice and may expose investors to additional undisclosed risk.
The descriptions of ETFs are often vague and generic. Further, some ETFs can carry confusing fee structures, allowing unscrupulous brokers to line their pockets.
FINRA has recently levied fines against major brokerages, including Citigroup Inc., Morgan Stanley, and Wells Fargo over the sale of inverse and leveraged ETFs. These products started as offerings for institutional investors, but have been offered to individuals. The regulatory agencies have started to crack down on this practice because of the complexity of inverse and leveraged ETFs and the additional risk.
If you have invested in ETFs on the recommendation of your broker and lost money, consider contacting the experienced investment attorneys at Meyer Wilson to determine whether your broker made an unsuitable recommendation.