Israels & Neuman, PLC Files FINRA Arbitration Claim Against Western International Securities, Inc. and Dawn Bennett

FOR IMMEDIATE RELEASE:  Israels & Neuman, PLC announces that it has filed a Financial Industry Regulatory Authority (FINRA) Arbitration Claim against Western International Securities, Inc., and Dawn Bennett.  Dawn Bennett, who is from the Washington, D.C-area, hosted a radio program called “Financial Myth Busting”, which is a program where Bennett attempts to combine her outlook on current events, economics, and political developments with personal financial advice.  The claim alleges that the investor was solicited by Western International Securities and Dawn Bennett to invest in a number of speculative precious metal funds that caused significant losses.

The claim also alleges that Dawn Bennett recommended that the investor (and her other clients) invest in a number of inverse ETFs (or exchange traded funds), which also had significant losses for the investor. ETFs are typically used to track and replicate the performance of an index, such as the S&P 500, the Russell 2000, or the Dow Jones.

In recent years, many companies have also created leveraged or inverse ETFs.  Inverse ETFs try to replicate the opposite (or even multiple opposites) of a particular index.  For example, Ultrashort QQQ Shares seeks a return of two times the inverse (-2x) of the daily performance of the NASDAQ-100 Index. Leveraged and inverse ETFs can be useful investment tools for investors seeking intra-day trading.

However, inverse and leveraged ETFs are often misused, by retail investors and even financial advisors.  The regulators and others have long-warned the securities industry about the dangers of inverse and leveraged ETFs.  These are designed to be day-trading vehicles, but often financial advisors recommend holding these ETFs in an investor’s accounts for weeks or even months.

FINRA has stated that “inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets.”  See FINRA Regulatory Notice 09-31 at page 1.  This Notice reminds members who sell these products to “make every effort to familiarize themselves with each customer’s financial situation, trading experience, and ability to meet the risks involved with such products and to make every effort to make customers aware of the pertinent information regarding the products.”  Id. at 3, citing to NASD Notice To Members 05-26.

The claim alleges that Israels & Neuman, PLC’s client put a high level of trust with respect to the management of their retirement funds in Dawn Bennett and Western International Securities. The claim further alleges that Dawn Bennett and Western International Securities failed to make suitable investment recommendations for their clients and did not adequately understand how inverse ETFs operate before recommending such to their clients.  It is alleged that the decisions made by Dawn Bennett and Western International Securities caused considerable financial damages to Israels & Neuman, PLC’s clients. The claim further alleges that Western International Securities failed to properly supervise Dawn Bennett.

The FINRA arbitration lawsuit filed by Israels & Neuman, PLC, alleges that Dawn Bennett also adopted an imprudent trading strategy.  According to the statement of claim, the investor was solicited to invest in gold, platinum, and palladium funds, funds that invested in emerging markets like Brazil, India, and China (often referred to as “BRIC” markets), and a number of inverse ETFs like ProShares Short Dow30, the ProShares Short QQQ, and the ProShares Short MidCap 400.  These investments caused significant financial loss for the investor, at a time when the overall equity market indexes made significant gains.

Israels & Neuman, PLC is a securities arbitration law firm with offices in Denver, Colorado and the Seattle-area.  Its national securities and investment fraud practice litigates securities fraud cases in every state.  Its attorneys have represented over 1,000 investors in cases to recover investment losses due to churning, unsuitable, investments, fraud, and negligence.

If you have been aggrieved or have lost money through an investment with Western International Securities or Dawn Bennett, Israels & Neuman encourages you to contact our offices for a free, no obligation, consultation.

Our attorneys will personally discuss with you all of your rights as an investor and what remedies you may have against Dawn Bennett and Western International Securities.  For more information, please call 720-599-3505, or visit www.israelsneuman.com.