A former Morgan Keegan registered rep has been barred permanently from the securities industry for putting some of his clients into leveraged ETFs that were unsuitable, according to a report Tuesday.

“According to FINRA, Michael Venable of Tyler, Texas, made unsuitable investments for ‘unsophisticated clients with conservative investment objectives and risk profiles’ by putting them in Direxion ETFs, some of which short various market segments,” Financial Planning reported. “The investors ranged in age from 40 to 91, with incomes from $25,000 to $50,000.”

Leveraged ETFs are volatile funds designed to magnify the market’s performance, usually on a daily basis. The products are geared to short-term traders, and the leverage is typically reset each day. [Trading Inverse and Leveraged ETFs]

Morgan Keegan terminated Venable’s employment in April 2010, according to the Financial Planning report.

At the end of February, there was about $1.2 trillion in U.S.-listed exchange traded funds and notes, with the vast majority of assets concentrated in long funds. Leveraged and inverse funds accounted for about $33 billion, according to data from the ETF Industry Association.

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