Rogue Broker at Stephens Inc. Caused Penalty, $1.9M Claim

by George Waldon  on Monday, Feb. 17, 2014 12:00 am  

Stephens Building (Photo by Mauren Kennedy)

The odd dollar value rounded out $19,643 Stephens voluntarily paid to reimburse a client of the company’s former employee, William Luplow III.

The offending investment was described as “evidences of indebtedness as investment securities of Stephens Inc., Real Properties Inc. or any other subsidiary.”

The securities commissioner back then was Harvey L. Bell.

Oct. 24, 1976: Stephens Inc. was fined $1,000 for failing to reasonably supervise its agent who was found to have transacted business in the state without being registered under the Arkansas Securities Act.

What Are Leveraged and Inverse ETFs?
Source: Financial Industry Regulatory Authority

Leveraged Exchange Traded Funds seek to deliver multiples of the performance of the index or benchmark they track. Inverse ETFs (also called “short” funds) seek to deliver the opposite of the performance of the index or benchmark they track.

Like traditional ETFs, some leveraged and inverse ETFs track broad indices, some are sector-specific and others are linked to commodities, currencies or some other benchmark.

Inverse ETFs often are marketed as a way for investors to profit from, or at least hedge their exposure to, downward moving markets.

Leveraged inverse ETFs (also known as “ultra short” funds) seek to achieve a return that is a multiple of the inverse performance of the underlying index.

An inverse ETF that tracks a particular index, for example, seeks to deliver the inverse of the performance of that index, while a 2x (two times) leveraged inverse ETF seeks to deliver double the opposite of that index’s performance.

To accomplish their objectives, leveraged and inverse ETFs pursue a range of investment strategies through the use of swaps, futures contracts and other derivative instruments.

Most leveraged and inverse ETFs “reset” daily, meaning that they are designed to achieve their stated objectives on a daily basis.

Their performance over longer periods of time — over weeks or months or years — can differ significantly from the performance (or inverse of the performance) of their underlying index or benchmark during the same period of time.

This effect can be magnified in volatile markets.



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