John D Kavaler- Unsuitable Investment Recommendations

investment fraud attorneysJohn D Kavaler Allegedly Made Unsuitable Investment Recommendations of VIX Short Term Futures ETN (VXX) to Customers

John D Kavaler allegedly made unsuitable recommendations to his customers to invest in VIX Short Term Futures ETN (VXX), according to Financial Regulatory Authority (FINRA) documents currently under review by investment attorneys Peiffer Rosca Wolf. According to FINRA, VXX is a highly volatile exchange-traded note. Kavaler’s alleged intent was to hedge his clients’ long positions in certain S&P 500 equity securities and hedge against potential negative macroeconomic events. However, the strategy that Kavaler implemented was allegedly not suited to the intended investment objective.

The VXX is an exchange-traded note that offers investors exposure to the returns of one- and two-month futures contracts on the CBOE Volatility Index (the “VIX Index”). VXX is rarely, if ever, considered a suitable hedge for specific equity positions. The value of futures contracts on the VIX Index generally decreases over time. The VXX exchange-traded note is a complicated and risky investment which is not suitable for unsophisticated investors.

John D Kavaler Fined and Suspended from Securities Related Business

FINRA Rules provide that an investment advisor must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. The recommendation must be based on the information obtained through the reasonable diligence of the investment advisor to ascertain the customer’s investment profile.

Kavaler accepted and consented to the entry of specific findings by FINRA contained within the Letter of Acceptance, Waiver, and Consent (AWC), without admitting or denying FINRA’s findings of fact. FINRA’s entry of findings alleged that Rubin engaged in an outside business activity without the written approval of Northwestern. Kavaler was sanctioned by FINRA with a three-month suspension from association with any FINRA member firm in any capacity and a $15,000 fine.

The Peiffer Rosca Wolf Investment Recovery Lawyers Often Represent Investors

The Peiffer Rosca Wolf investment recovery lawyers often represent investors who lose money as a result of investment misconduct. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment misconduct may contact the investment recovery lawyers at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1123 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.