Erez Law is currently investigating recommendations from brokerage firms across the country who recommended investments in ProShares Ultra VIX Short Term Futures Exchange Traded Funds (UVXY). UVXY provides leveraged exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration, according to the fund website.
UVXY was designed for knowledgeable, risk-tolerant investors who seek to profit from volatility of the S&P 500 and reduce U.S. equity portfolio risk. This fund is intended for short-term use and specifically for investors who actively manager and monitor their investment portfolios.
However, this highly risky fund was sold to unsuspecting conservative investors. Additionally, this fund is not an investment company regulated under the Investment Company Act of 1940 and is not afforded its protections, thus increasing the risk for investors.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, brokerage firms across the country may be liable for investment or other losses suffered due to its registered representatives.
Erez Law represents investors in the United States for claims against brokerage firms regarding investments in ProShares Ultra VIX Short Term Futures Exchange Traded Funds. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.