VIX Short Term Futures ETN (VXX) Investments: Unsuitable Sales Practices by Brokers Investigated

New Orleans stockbroker fraud attorney

New Orleans stockbroker fraud attorney

Unsuitable Sales Practices by Brokers Who Recommended VIX Short Term Futures ETN (VXX) Investigated by Securities Lawyers

VIX Short Term Futures ETN (VXX) securities may have been inappropriately sold to some investors by certain investment professionals, the Peiffer Rosca Wolf securities lawyers have learned.  VIX Short Term Futures ETN (VXX) is a highly volatile exchange-traded note, according to Financial Regulatory Authority (FINRA) documents. Certain investment professionals have been accused of recommending these investments to investors with disregard of those investors’ suitability and risk profiles. Peiffer Rosca Wolf attorneys, Joe Peiffer and Alan Rosca, believe that recommendations to purchase VXX were unsuitable for many investors.

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, according to FINRA.

FINRA Rules Violations Committed by Unsuitable Sales Recommendations

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

FINRA has already sanctioned one broker in connection with recommendations of the VXX investments. FINRA alleged that the broker failed to take into account the significant difference between hedging strategies to limit potential losses and trading in a speculative investment to turn a quick profit on market movements or expected market movements. FINRA also alleged that the broker’s customers did not fully understand the product, and therefore should not have been encouraged to purchase it.

Investor Rights Lawyers Investigating

The Peiffer Rosca Wolf investor rights attorneys often represent investors who lose money as a result of alleged investment schemes. Peiffer Rosca Wolf investor rights attorneys are currently investigating sales practices of some of the investment professionals who allegedly made unsuitable recommendations involving VIX Short Term Futures ETN (VXX).

Peiffer Rosca Wolf attorneys 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 professionals whom investors believe allegedly provided unsuitable recommendations involving VIX Short Term Futures ETN (VXX) may contact the investor rights attorneys 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 (1157 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.