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]