On September 27, 2012, FINRA Chairman and CEO Richard G. Ketchum spoke at the Complex Products Forum sponsored by the Securities Industry and Financial Markets Association (“SIFMA.”) (You can read the speech here). SIFMA is a trade association and lobbying group that represents hundreds of securities firms, banks, and asset managers, so Ketchum was addressing the guys who invent and sell all those wonderfully shady investment products in which our clients lose their money.
The speech appears to be aimed at warning industry members that if they want to sell a complex products, they will have to subject them to heightened suitability considerations and diligence both before and after their sale. Ketchum suggests that if the investment product will be considered complex if the average retail investor probably will not understand how its features will interact under different market conditions, and how that interaction may affect potential risk and return.
The speech is well worth a read, but if you’d rather look at an excellent summary, we suggest you check out Jack Duval, Principal and Senior Analyst at ORIGINAL forensic analysis + visualization. Jack is a highly respected expert in securities litigation matters and has testified in many of our cases.
If you lost money in a complex product such as a Leveraged or Inverse ETF, Non-Traded REIT, Reverse Convertible, Exchange Traded Note, or any other complex, structured, or exchange-traded product, contact us today. You can reach us through our online form or e-mail us at hdb@mccarthylebit.com, or feel free to call us at 866-932-1295.
Hugh Berkson is a Securities Attorney with McCarthy, Lebit, Crystal & Liffman, Co. LPA. Hugh is rated AV® Preeminent™ by Martindale-Hubbell®.
He obtained a business degree in Finance from the University of Texas at Austin in 1989, and is a 1994 graduate of Case Western Reserve University School of Law, where he was a member of the Order of the Barristers and received both the American Jurisprudence Award, (National Mock Trial) in 1993 and the Jonathan M. Ault Mock Trial Prize for 1993-1994.
