Silver Oak Securities, Incorporated (CRD #46947, Jackson, Tennessee) recently submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000.
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it permitted a registered representative to recommend and sell non-traditional ETFs to some of the firm’s customers. The findings stated that the firm did not investigate the characteristics and risk factors of such products before allowing its representative to recommend them to customers or provide its representatives any training or other guidance specific to whether and when non-traditional ETFs might be appropriate for their customers. The firm did not implement any procedures for supervising the firm’s purchase and trading of non-traditional ETFs. Instead, it relied on supervisory systems that were already in place. The findings also stated that as a result of the firm’s failure to implement a supervisory system tailored to non-traditional ETFs, the firm did not monitor transactions involving non-traditional ETFs, which would include tracking the volume of customers’ holdings in non-traditional ETFs, as well as tracking the length of time open positions were maintained in non-traditional ETFs, and any resulting unrealized losses. The firm did not impose any limitations on trading or holding non-traditional ETFs.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
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