Stockbroker Fraud Lawsuit

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Exchange Traded Funds

What are Exchange Traded Funds "ETFs"

When developing an investment portfolio, an investment broker may recommend an Exchange Traded Fund, or "ETF." An ETF is a type of security that tracks an index, a group of securities, or a commodity. These are popular choices for some investors because they allegedly offer a simple solution for obtaining investment diversification. Unfortunately, what many investors don't realize, and what many brokers fail to disclose, is ETFs commonly use risky investment strategies, which may make them unsuitable for most investors. Like any investment, before a broker recommends an ETF he or she must have a thorough understanding of their client's goals and risk tolerances, as well as the underlying security.

Types of ETFs

There are several different types of ETFs that each carry their own specific risks. Some examples include:

  • Index ETFs
  • Currency ETFs
  • Bond ETFs
  • Leveraged ETFs
  • Inverse ETFs

Each type of ETF uses different strategies to obtain positive returns for the investor. These strategies range from the simple tracking of indexes to more complex methods that involve risky financial maneuvers. Additionally, some ETFs are not registered financial companies and therefore can be difficult to monitor and evaluate.

ETF Lawsuits

If an individual or institutional investor losses money in an ETF they may have the ability to recover their losses if their broker committed an error or misconduct. Each investor has a certain risk tolerance as well as specific goals in terms of investing. An investor's broker has a fiduciary duty to evaluate his or her client's unique position and goals, and make recommendations based on investing best practices. When a broker fails to conduct him or herself in this manner, or mismanages an investment portfolio, the investor can sue the broker to recover investment losses, otherwise known as "damages."

ETF Lawyers

ETF lawyers are essentially stock broker fraud attorneys who help investors recover their losses suffered from exchange traded fund investments. The ETF lawyers listed at the top of this page are nationally recognized as leaders in advocating on behalf of clients who have suffered losses as the result of negligent or reckless brokers, and will work with you to determine whether you have a case and the amount you can recover. Call today to schedule your initial consultation.

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