Tag Archives: MLPQ Loss Recovery

Legal Remedies for ETF Loss

Call 1-866-817-0201 to speak to an attorney concerning legal remedies for ETF losses.  Many individuals lost savings in leveraged, inverse and other ETFs they should never have been recommended.  Call to speak to an attorney about your legal options.  Initial consultations are free and confidential.

If you have significant losses in leveraged or inverse  ETFs or ETNs and you are not a sophisticated, day-trading investor, you may be entitled to legal remedies for your loss.  Brokers and advisers have the obligation to recommend only suitable investments.  The following investments are only suitable if your are speculative investor, and only then if the investment is held less than one day:

CREDIT SUISSE NASSAU X LINKS MONTHLY PAY 2X LEVERAGE (AMJL)

UBS AG LONDON ETRACS 2X MONTHLY LEVER S&P MLP (MLPZ)

DBX ETF TRUST DIREXION DAILY HOMEBUILDERS SUPP BULL 3X (NAIL)

DIREXION SHARES ETF TRUST DAILY REGIONAL BKS BULL 3X SHS (DPST)

UBS AG LONDON ETRACS 2X MONTHLY LEVER LNG AL (MLPQ)

PROSHARES ULTRAPRO QQQ ETF (TQQQ)

DIREXION DAILY S&P 500 BULL 3X SHARES (SPXL)

DIREXION DAILY GOLD MINERS BEAR 3X AND 2X SHARES (DUST)

DIREXION DAILY GOLD MINERS BULL 3X AND 2X SHARES (NUGT)

DIREXION DAILY S&P OIL AND GAS (GUSH)

PROSHARES ULTRAPRO S&P 500 (UPRO)

ETRACS MONTHLY PAY 2X LEVERAGED S&P DIV. ETN (SDYL)

UNITED STATES OIL FUND (USO)

Invesco and ProShares QQQ derivations

FINRA, the regulator that oversees the actions of brokers, has stated that these investments are toxic for average investors.  The investments reset every day.  As a result, the investments compound in their losses and the nature of them can change drastically over the course of a few days.  The following was stated by FINRA in NTM: 09-31:

“Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track—or both—are growing in number and popularity. While such products may be useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis. Due to the effects of compounding, their performance over longer periods of time can differ significantly from their stated daily objective. Therefore, inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.”

The daily resetting can be devastating for an investor that hold these investments for more than one day.  So a broker or advisor who recommends the investment and then allows the investment to sit more than 24 hours takes a legally impermissible chance with the savings of his/her investors.

The resetting can cause the investment to lose money even if the underlying index is stable or increasing.  This is due to many factors including cost drags of compounding interest.

History has supported this.  In February 2018 many inverse and leveraged ETF investors, for such investments tied to the VIX index, lost 80% to 100% of the value of these investments in the period of 48 hours.

The risk of these investments may not be something you know, but they are something your broker or advisor knew or should have known.  If you suffered such losses please call 1-866-817-0201 for a free and confidential consultation.