The securities and investment lawyers of Gana LLP are investigating a customer complaint and an employment separation after allegations filed with the Financial Industry Regulatory Authority (FINRA) again broker Louis Frederick Scherschel (Scherschel). According to FINRA’s BrokerCheck records for Scherschel, there is a disclosure on his record for a customer complaint that resulted in arbitration. In October 2015, a customer complaint alleged that Scherschel made unsuitable sales of leveraged EFTs and failed to follower the customer’s instructions to implement sell stops. The original requested damages amount was $500,000 and the case was settled in September 2016 for $295,000.
In September 2015, Scherschel was discharged from his position at Sigma Financial Corporation for failing to comply with the company’s correspondence policy for leveraged ETFs.
Scherschel entered the securities industry in 2009. He was previously registered with:
• RBC Capital Markets, LLC (March 2009 – June 2013)
• Sigma Financial Corporation (May 2013 – September 2015)
After his employment separation from Sigma, Scherschel was employed at Prosperity Wealth Management, Inc. in San Ramon, CA. He is currently employed at Designed Capital and Louis Scherschel Architecture.
A leveraged exchange-traded fund (ETF) uses financial debt to amplify the returns of an underlying stock. An investor can think of an ETF like a mutual fund that trades like a stock. Many investors are attracted to ETFs because of their low cost and the ability to actively trade them. Leveraged ETFs are generally used for short term trading. As the Securities Exchange Commission has warned: Most leveraged ETFs reset daily, meaning that they are designed to achieve their stated objectives on a daily basis. Their performance over long periods of time can differ significantly from the performance of their underlying index or benchmark. Brokers should explain the risks of ETFs to investors before recommending them. Investors should recognize their risks and fully understand those risks before investing.
Gana LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to unsuitable trades. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.