Summit Brokerage Services Fined by FINRA and Ordered To Pay Resititution

March 7, 2016 - PRLog -- Summit Brokerage Services, Inc. (Boca Raton, Florida) submitted an AWC (acceptance waiver and consent) in which the firm was censured, fined $250,000 and ordered to pay $9,556.84, plus interest, in restitution to customers. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that by and through certain of its registered representatives, it recommended leveraged and inverse exchange-traded funds (nontraditional ETFs) to certain customers without fully understanding the unique features and specific risks associated with them. The findings stated that the firm allowed their registered representatives to make unsuitable recommendations to customers to purchase nontraditional ETFs by failing to conduct adequate due diligence  on the products. The firm did not provide adequate formal training to its representatives  regarding non-traditional ETFs before permitting them to recommend the products to  customers. As a result, the firm’s registered representatives were insufficiently informed  regarding the unique features and specific risks associated with nontraditional ETFs.

These recommendations resulted in the firm’s retail customers buying and selling approximately $250 million worth of nontraditional ETFs. Several customers with conservative investment objectives who bought one or more nontraditional ETFs based on recommendations made by firm registered representatives, and who held those investments for longer periods of time, experienced net losses. The findings also stated that the firm failed to establish and maintain an adequate supervisory system, including written procedures, reasonably designed to ensure that the firm’s sales of nontraditional ETFs were in compliance with applicable federal securities laws and NASD and FINRA rules.

If you lost money in ETFs with Summit brokerage services call (888) 760-6552 for a free consolation with a securities attorney or visit http://www.securitieslawyer.com