Securities Lawyers Blog
Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Dominic Tropiano (Tropiano) currently not associated with any broker-dealer. The complaints against Tropiano allege unsuitable investments, unauthorized trading, fraud, and breach of fiduciary duty among other claims. Many of the complaints involve leveraged and non-traditional exchange traded funds (ETFs) securities. According to brokercheck records Tropiano has been subject to five customer complaints.
The most recent complaint was filed in August 2016 alleging investments in leveraged ETFs, violations of the Ohio Securities Act and FINRA rules, negligence, unsuitability among other claims. The complaint alleged $800,000 in damages and is currently pending.
As a background, non-traditional ETFs are speculative securities that are rarely appropriate for retail investors. Non-traditional ETFs are usually used by institutional investors engaging in sophisticated strategies. Non-traditional ETFs use a combination of derivatives instruments and debt to multiply returns on an underlining asset basket such as a stock, commodity, currency or other index. These funds often attempt to generate 2 to 3 times the return of the underlining asset class. Non-Traditional ETFs are also used to earn the inverse – or opposite – result of the return of the benchmark. Non-Traditional ETFs are generally designed to be used only for short term trading – in many cases for only holding the security for a single day.