FINRA Regulatory Notice: Commodity Futures Linked Securities

FINRA Regulatory Notice 10-51 warns firms “that offer commodity futures linked securities that they must ensure that communications with the public about these securities are fair and balanced, that recommendations to customers are suitable and that their registered representatives adequately understand and are able to inform their customers about these securities before they recommend them.” Obviously, FINRA has concerns about the sales practices used by firms selling commodity futures linked securities, whether the staff is adequately trained about the product and whether there are adequate supervisory safeguards in place to comply with federal securities laws and FINRA rules.

Investors have been sold a bill of goods regarding these securities, as firms and their advisors prey on the fact that interest in them has mirrored the record prices of commodities such as gold and silver. Unfortunately, most investors are ill equipped to withstand the volatility associated with commodities making them unsuitable for this and a litany of other reasons.

If you have suffered losses from commodity futures linked securities, contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.

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