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Displaying 10 out of 110 results for "Inverse ETF".

Material Misrepresentations in XIV's Prospectus Led to $700 Million in Losses

Executive Summary

Credit Suisse's XIV Exchange Traded Note (ETN) linked to the inverse of short-term VIX futures prices lost 97% of its value or approximately $2 billion in a single day on February 5, 2018. Credit Suisse announced the following morning that it would redeem all outstanding XIV shares at the Closing Indicative Value on February 15, 2018.1

Figure 1 reports the daily closing price for XIV from its inception in November 2010 to its demise in February 2018. The run-up in 2017...

This is Why Merrill Lynch Paid the SEC and FINRA $15 million over Bank of America's VOL Index-linked Structured Products.

The Securities and Exchange Commission yesterday announced a settlement with Merrill Lynch over structured products linked to Bank of America's proprietary investable volatility index based on VIX Future contracts ("VOL Index"). The SEC press release announcing the settlement and its Order Instituting Proceedings are available on the SEC website. The companion FINRA settlement press releaseand AWC are available on the FINRA website. Bank of America published its VOL Index in 2010 and shortly...

Ohio Division of Securities, In the Matter of Timothy K. Fife - Ohio IA Registration to be Revoked

In February 2016, after evidentiary hearings, the Hearing Examiner recommended that Timothy Fife's investment adviser representative registration be revoked. The Report and Recommendation is available on our website. Fife's registration is being revoked because he provided investment advice and initiated securities transactions while not licensed in Ohio and because he recommended the unsuitable purchase and holding for extended periods of time of leveraged and inverse ETFs. Dr. McCann ...

More Impossible Trade Prices Caused by Auto-liquidators: Option Combinations

In three previous blog posts, we documented how auto-liquidators execute option trades at distorted prices to their clients' detriment. The price distortions are caused by the price impact of large sell or buy orders on thinly traded securities. These distortions were reversed within minutes, but not before causing investors millions of dollars of unnecessary losses.

In "The Recent Market Turmoil Spells Trouble for Auto-liquidators like Interactive Brokers", we showed that thinly traded...

FINRA Enforcement Actions: Month in Review

MAY 2014 SELECTED FINRA ENFORCEMENT ACTIONS

FIRMS FINED

ABN AMRO Clearing Chicago LLC (CRD #14020, Chicago, Illinois)

ABN AMRO Clearing Chicago LLC consented to a censure and $95,000 fine for allegedly failing "to report short interest positions to the New York Stock Exchange and FINRA on certain settlement dates, and submitt[ing] to FINRA an inaccurate short-interest position report." FINRA found that the firm's supervisory system did not provide for supervision reasonably designed to achieve...

FINRA Enforcement Actions: Month in Review

APRIL 2014 SELECTED FINRA ENFORCEMENT ACTIONS

FIRMS FINED

The Huntington Investment Company (CRD #16986, Columbus, Ohio)

The Huntington Investment Company consented to a $25,000 fine and censure. The firm consented to an entry of "findings that it failed to provide notice to the MSRB via the Electronic Municipal Market Access System (EMMA) that no preliminary official statements or official statements were to be prepared for bond anticipation note offerings in which the firm participated."...

The Use of Leverage in the UBS Puerto Rico Closed-End Funds Magnified Losses

The massive declines that hit investors in the UBS Puerto Rico closed-end bond funds in 2013 were especially quick and brutal for fixed income securities which are usually safer investments. In previous posts we have discussed some of the reasons for the precipitous fall in the values of the bond funds and some of the nuances of bond transactions that may have given rise to conflicts of interest between the fund managers and investors. In this post, we will discuss another culprit in the...

SEC Examiniation Priorities 2014

The Securities and Exchange Commission (SEC) senior staff recently announced their 2014 examination priorities . The national examination program will be focusing on fraud detection and prevention, corporate governance, and registrants that serve as both a broker-dealer and investment adviser.

SEC staff also plans to undertake initiatives that examine the rollover of retirement vehicles during employment transitions or near retirement. In particular, the staff is concerned about misleading...

FINRA Regulatory Priorities 2014

Early this month, the Financial Industry Regulatory Authority (FINRA) released their 2014 regulatory and examination proirities . FINRA is continuing to focus on the suitability of recommendations made to retail investors. FINRA specifically mentions complex structured products (including leveraged ETFs), non-traded REITs, frontier funds, and interest rate sensitive instruments such as mortgage-backed securities and municipal bonds. At a recent conference, a FINRA representative added that...

SPIVA Scorecard: Persistent Lack of Persistence

Earlier this week, S&P Dow Jones Indices released their semiannual SPIVA Persistence Scorecard, which assesses how consistent top performingactively managed US equity mutual funds have been. This is the third SPIVA release since our blog has been in existence and each time we bring attention to their work. Once again, their results suggest that mutual fund managers only rarely outperform for long.

This year the study found that roughly 7% of funds that were in the top 25% of actively managed...

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