The Financial Industry Regulatory Authority has filed a case against Richard William Lunn Martin, a former broker. According to the self-regulatory organization, from at least 3/11 through 7/15, and while he was a GF Investment services broker, Martin encouraged clients to invest in high-risk non-traditional exchange-traded funds so he could hedge against what he anticipated would be a pending financial crisis. Martin purportedly believed that the financial and monetary system was going to fail. FINRA said that he lost customers $8M as a result of the bad investment advice he gave them.
Because of his fears, said FINRA, Martin recommend that clients put their money in inverse and leveraged funds, which are typically not suitable for retail investors. This is especially true when the market is volatile and the investor intends to hold the funds for longer than one trading session. Examples of recommendations that he made:
· Direxion Daily Gold Miners Bear 2x Shares (DUST)
· Proshares UltraPro Short Russe112000 (SRTY)
· Proshares UltraPro Short QQQ (SQQQ)