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Home > Blog > FINRA fines Berthel Fisher $775,000 for compliance failures

FINRA fines Berthel Fisher $775,000 for compliance failures

Monday, FINRA fined broker-dealer Berthel Fisher & Co. Financial Services Inc. and an affiliate $775,000 for compliance failures, including nontraditional exchange –traded funds and inappropriate sales of alternative investments.

Berthel Fisher, is saying that “The investigation was a result of a sweep done by FINRA throughout the industry, and that the firm settled the case to eliminate any on-going legal expenses.” Securities regulators have fined many broker-dealers that allegedly failed to conduct due diligence to ensure proper training in selling complex products for their employees and investment offerings.

According to FINRA, Berthel Fisher exposed clients to overconcentration in the asset class and their reps recommended $49.4 million in nontraditional ETFs to more than 1,000 clients. Resulting in net loses, the products were sold to customers who preferred a conservative investment approach and sometimes the investments were held for years.

Generally not considered suitable for conservative investors, leveraged and inverse ETF’s can deviate greatly from their benchmark s over periods longer than a day and magnify exposure to market movements.

In addition to the FINRA fine, Berthel Fisher will have to pay nearly $13,293 in restitution to investors and retain a compliance consultant. Berthel Fisher stated, “That it has removed leveraged and inverse ETFs from its platform.”

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