The blog D&O Diary (Nov. 5, 2009) describes the rapid growth in class action suits against U.S. leveraged ETF providers. The suits allege failure to adequately disclose the risks of losses, particularly of widespread divergence from the benchmarks over time. FAIR Canada has written extensively about problems with the disclosure and performance of leveraged, inverse and commodity ETFs.
We are pleased that both the Investment Industry Regulatory Organization of Canada and the British Columbia Securities Commission saw fit to issue warnings about these products.
FAIR Canada issued two investor alerts on May 14, 2009 and July 13, 2009.
