Sheaff Brock Option Trading Investigation

Sheaff Brock Put Option Income Strategy Caused Losses

The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Sheaff Brock a registered investment advisor that offered a put option income strategy that it described as a conservative way to earn income.

Sheaff Brock described the program as a conservative “income generator”, which belied the actual risks associated with the strategy that targeted stocks with increased volatility.  Sheaff Brock represented that the strategy would stack small monthly gains from its proprietary strategy, which would amount to a six percent annual return, without incurring substantial risk.

In fact, Sheaff Brock’s strategy of selling out of the money put options exposed the investors to substantial (and catastrophic) risks.  Large market moves, such as those that occurred in August 2015 can wipe out years of gains, and cause principal losses that are impossible to recoup.

Sheaff Brock lured clients into a false sense of security with their regular market newsletters that contained boastful and unrealistic descriptions of the successes achieved.  These over optimistic descriptions could run afoul of industry rules which prohibit firms from making promises of specific results or exaggerated or unwarranted claims.  When making claims of these sort, Sheaff Brock was obligated to include a disclaimer or a statement of corresponding risk to avoid misleading customers.

Option trading is not suitable for all customers.  Before entering into an option trading program a firm must establish that the trading will be suitable for the client.  Furthermore, firms must take steps to ensure that accounts are not excessively traded (or “churned”) and that the rep is not making “wholesale recommendations” of particular trades to his clients.

Sheaff Brock registration and disciplinary history

In order to lawfully sell investments to the public, a registered investment advisor must either be registered or exempt from registration.  FINRA maintains a database that the public can access to check the credentials of firms and their financial advisors.  The website, also known as broker check has a listing for Sheaff Brock, which is an SEC reporting investment advisor firm.

If you suffered investment losses in option trading please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation to discuss your legal rights and options.  Our firm has experience representing investors in high risk option trading cases.  In January, 2018 we received an award of $911,000 including attorney’s fees and punitive damages on behalf of victims of the August, 2015 market collapse.  The clients in that matter had been invested in a put option “spread strategy”.

There is no charge for an initial consultation with us, so call (702) 380-3131 today to speak with an experienced securities attorney who will fight to recover your losses. Our firm takes cases on a straight contingency fee, with no money up front, and no money owed unless there is a recovery.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery.  For the past 25 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions.  During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies.  The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.