The Financial Industry Regulatory Authority will bring enforcement cases against brokerage firms for selling complex ETFs that were not suitable for their clients, according to a report Wednesday.

“We don’t have a qualm with the product,” FINRA enforcement chief Bradley Bennett told Reuters. “We just want to make sure that people who are selling them understand them.”

Bennett declined to name the firms that will face the FINRA enforcement cases, according to the report.

Exchange traded funds and notes are under more scrutiny following the recent meltdown in VelocityShares Daily 2X VIX Short-Term ETN (NYSEArca: TVIX) after its premium collapsed and caught some investors by surprise. [TVIX Washout Raises Questions Over ETNs]

FINRA was investigating how companies marketed ETNs and other complex products, according to recent reports.

Last month, FINRA permanently barred a former Morgan Keegan registered rep for putting some of his clients into leveraged ETFs that were unsuitable. [Broker Barred Over Leveraged ETF Investments]

Leveraged and inverse ETFs are designed for traders hoping to capture short-term market swings.

“But FINRA is concerned that brokers are selling these products to long-term retail investors, despite the dangers with holding on to these products for more than a day,” Reuters reported Wednesday.

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