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Zamansky LLC Investigates Insight Securities Over Customer Losses In Leveraged and Inverse Exchange Traded Products

April 19, 2023 Active Cases & Investigations

In December 2022, Insight Securities Inc. (“Insight Securities”) in Highland Park, Illinois, agreed to a censure and fine of $25,000 in a regulatory settlement with FINRA, the Financial Industry Regulatory Authority. This disciplinary action was the result of FINRA’s allegations that Insight Securities, from March 2017 and June 2020, failed to reasonably supervise recommendations of non-traditional exchange-traded products such as leveraged and inverse-exchange traded notes (ETNs).  Due to their complexity and risk, leveraged and inverse ETNs are rife for potential investment fraud.

Leveraged and Inverse ETNs May Be Too Risky For Certain Investors

Non-traditional exchange-traded products such as leveraged and inverse ETNs are a category of complex structured products that can be difficult for investors to see the downside risk.  Typically, leveraged ETNs may offer a fixed rate that is attractive to an investor who is retired or seeks income.  However, the ETN may carry a hidden downside risk that is not clear until the market or a reference security falls in value, putting a loss to the investor.

Investors need to be aware that all ETNs –- no matter how they are labeled — can be aggressive and high-risk products that are not safe for income-seeking investors or retirees.  Many ETNs do not guarantee a return of the investor’s principal at maturity but can be redeemed earlier, usually at the worst time. . Therefore, depending on the performance of the underlying reference index or asset, customers who purchase such products could lose some or all of their principal at maturity.

With the market downturn in 2022, investors may be surprised by losses from leveraged and inverse ETNs which had more downside risk than they ever expected. The unknown downside risk is usually a sign of potential investment fraud, says Jake Zamansky, investment fraud attorney, and any investor with losses that they did not expect should have their portfolio reviewed.

What an Investor Can Do

If you invested in a leveraged or inverse ETN through Insight Securities and wish a review of whether you may have a legal claim to recover your losses due to investment fraud, please call investment fraud attorney Jake Zamansky at (212) 742-1414 or email for a free evaluation of your potential legal rights.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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