Alton Securities Group Investigation

September 18, 2015

Salas Wang LLC is launching an investigation into Alton Securities Group Inc. for recommending unsuitable investments to clients.  Specificially, a FINRA disciplinary action recently disciplined one of Alton’s supervisors for failing to supervise one of Alton Securities Group’s employees, specifically:

[Alton Securities Group broker] periodically recommended and sold complex products to his customers. For example, at various times during the Relevant Period, [he] recommended and sold leveraged/inverse exchange traded funds and leveraged/inverse mutual funds. In addition, MM recommended and sold a “steepener note,” designed to increase in value as the gap between short and longterm interest rates increased. MM, however, lacked a reasonable basis to recommend these products to his customers because he did not fully understand the potential risks associated with these securities.

[Alton Securities Group broker] also recommended and executed 50 unsuitable purchases of Class A shares of leveraged/inverse mutual funds. Because oftheir fee structure, Class A mutual fund shares are generally preferable to Class B or C shares only when held for several years or longer. [The]customers who purchased the Class A shares, however, typically held them for less than a year, and in some cases, only for several months. As a result, [the broker]’s recommendations of Class A shares of leveraged/inverse mutual funds were unsuitable.

If you are an investor that lost money investing with Alton Securities Group or in these leveraged ETFs, or have purchased Class A shares of mutual funds for short term investments you may be able to recover your losses through FINRA arbitration or securities litigation.  You can contact Jeff Salas at 312.803.4963 or through the contact form below.

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