Wed, August 19, 2009
SEC Adds Its Voice to Warnings About Leveraged and Inverse ETFs
The SEC issued a joint warning with FINRA today about the risks of leveraged and inverse ETFs for retail investors.
The SEC’s notice, titled “Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors,” repeats warnings already issued by FINRA in June.
The SEC warning comes not only after FINRA’s action, but also long after Massachusetts Secretary of State William Galvin demanded information from brokerage firms selling the funds to determine if any laws have been broken.
In view of the fact that the SEC has been approving the registration of these funds for the past three years, it seems a bit late to the party. But its warning notice does provide some nice educational information and resources on exchange-traded funds.
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