LPL Financial hit with $160,000 Award in VIX case

LPL Financial hit with $160,000 FINRA arbitration award.

In June, 2017, a FINRA arbitrator panel sitting in San Francisco issued a $160,000 binding arbitration award against LPL Financial in a case involving VIX derivative securities.

The VIX is a measure of the expected volatility in the stock market, specifically the S&P 500.  The VIX serves as a barometer of investor sentiment, and it is used as a tool to hedge against market volatility.  Among the ways to benefit from the rise and fall of the VIX index is buy purchasing or selling VIX option and futures. This can also be done via fund shares or exchange traded notes.

The underlying matter involved allegations that brokers working with LPL Financial made unsuitable investments in the ProShares Ultra VIX short term futures fund.  “Ultra” funds magnify the price movement of the VIX inside the fund by using additional leverage, sometimes up to three times the actual movement in the index itself.  In addition to claims of unsuitability, the Claimants made claims for elder abuse, breach of fiduciary duty, violations of California’s Securities Laws and violations of the federal securities laws.

After a four day arbitration hearing in May, 2017, the arbitrators rendered their decision and awarded the Claimant $160,000 in compensatory damages.

As a result of this award The Law Office of David Liebrader has opened an investigation into VIX trading at LPL Financial.

LPL Financial is a California corporation formed in 2010.  It was previously known as Linsco/Private Ledger.  The firm is registered in 53 U.S. states and territories and is licensed with FINRA and through the SEC.  LPL Financial’s broker check lists 169 disclosable events, including 106 regulatory investigations and 59 arbitration claims.

FINRA Code of Arbitration Procedure section 12904 governs the issuance and payments of awards. Key provisions of the rule are that the award may be entered as a judgment in any court of competent jurisdiction, after a motion to confirm the award is filed pursuant to state or federal law. Furthermore, unless the applicable law directs otherwise, all awards rendered under the Code of Arbitration Procedure are final, and are not subject to review or appeal. Grounds for overturning binding FINRA arbitration awards are extremely limited.  Shane Melito has thirty days to pay the award, or to seek to have the award vacated.

If you are the victim of investment fraud, or if you have lost money in the ProShares VIX fund 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 takes cases on a straight contingency fee, with no money up front, and no money owed unless there is a recovery.

There is no charge for the initial consultation, so call (702) 380-3131 today to speak with an experienced securities attorney who will fight to recover your losses.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 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.


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