Articles Tagged with Fidelity Investments

Chicago-based Stoltmann Law Offices is investigating incidences of investors whose brokerage accounts have been hacked. Market regulators are investigating reports that customers of the popular online trading app Robinhood were ripped off. Hackers reportedly obtained account information of Robinhood customers, then transferred funds out of their accounts. The customers have contacted the U.S. Securities and Exchange Commission and FINRA, the securities industry regulator, to probe the thefts.

How safe is your money in an online brokerage account? It should be protected by numerous safeguards, although lately cyberthieves have found a way to steal money directly from investors. During the COVID pandemic, online trading soared, with millions of day traders using their phones and other devices to trade stocks and other securities. But as a recent wave of customer complaints suggest, their accounts have been hacked and money taken from their accounts, according to Bloomberg News.

In a statement to Bloomberg, Robinhood did not take responsibility for the thefts:

According to a recent InvestmentNews article, Fidelity Investments suspended sales of MetLife Inc.’s retail variable annuities, as their sales fell by almost 40% in the second quarter of this year. MetLife’s retail variable annuity sales were down 39% year-over-year in the second quarter, primarily due to the sales suspension by Fidelity. In 2015 alone, MetLife was the number eight seller of variable annuities, with more than $7 billion in total sales. In February, Fidelity suspended the sales of MetLife products in the Growth and Income Annuity and the Accumulation Annuity. This was because the insurer announced in January that it was planning a separation of its U.S. retail unit, which provides variable annuities. This uncertainty over the potential sale or initial public offering of the business led to its decision to stop the sales. MetLife had $1.1 billion in variable annuity sales in the second quarter, compared to $1.9 billion in the same quarter in 2015. Insurers have seen industry-wide variable annuity sales slide over the past several years. Total first-quarter sales were at their lowest in 15 years, due mainly to market volatility. Sales are expected to continue to go down as new regulation comes into effect next year. Please call our securities law firm today to speak to an attorney. 312-332-4200.

As federal regulators crack down on exchange-traded funds (ETFs) because of the high risk they pose to investors and the markets, Fidelity Investments’ brokerage is restricting opening transactions in some exchange-traded products. Fidelity is claiming that its decision to bar retail customers from buying the products stems from suitability concerns, rather than regulatory pressure. Fidelity spokesman Robert Beauregard stated: “as part of our responsibilities to our retail account holders, we continually review security products being offered to our retail brokerage customers to ensure that they are at least generally suitable for some customers, and that we are able to support them appropriately.” This could include ETFs that exceed a 10% tracking error on their benchmarks or when they have traded at a 10% or greater discount or premium the previous 30 days. Other factors that could affect this are whether there are excessively complex or unique features, or unusual risks, and whether comparable securities that are less complex may be available, liquidity in the marketplace, quality and ease of access for retail customers to material information available about the securities and fess associated with the product.

Other brokerage firms such as Schwab will occasionally warn investors that a particular ETF might be appropriate for the average investor, but wont keep the investor from making the purchase. Instead, the firm provides a lengthy warning about inverse or leveraged ETFs. The Financial Industry Regulatory Authority (FINRA) has also been warning about leveraged and inverse ETFs for a long time. The SEC is currently pondering placing sharp restrictions on funds that use excessive leverage. This seems to be the first step in holding brokers and brokerage firms to a higher standard of fiduciary duty, by steering clients away from products with high risk, illiquidity and structural unreliability.

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