Douglas Lamb Allegedly Recommends Highly Unsuitable Leveraged ETFs

Oakes & Fosher is presently investigating the possible misconduct of securities broker Douglas Lamb. According to his publicly available FINRA BrokerCheck report, Douglas Lamb has been the subject of multiple customer disputes over the course of his career.

Douglas Lamb is presently working as a New York based securities broker. He has worked in the securities industry for twenty-three years. During his career, he has been registered with nine different securities firms.

His Registrations

• Rodman & Reinshaw Inc. (1995)


• Mesirow Financial (1995-1997)


• Ladenburg, Thalmann & Co. (1997-2003)


• Ryan Beck & Co. (2003-2005)


• SMH Capital Inc. (2005-2009)


• Fintegra, LLC (2009-2012)


• Hennion & Walsh Inc. (2012-2014)


• Financial America Securities, Inc. (2014-2015)


• Cova Capital Partners (2016-Present)

The Allegations

• In July 2009, an attorney, on behalf of a customer, alleged that Douglas Lamb engaged in an unsuitable options trading strategy, over-concentrated the customer's account in equities, and engaged in an unauthorized use of discretion. This case was settled for $205,000 in damages.


• In January 2010, customers alleged that the trades Douglas Lamb made in their account were contrary to to their financial situation, goals, and risk tolerance. They also alleged that his trading of their account was excessive. This case is currently pending.


• In March 2010, an attorney, on behalf of a customer, alleged that Douglas Lamb instituted a highly unsuitable trading strategy that involved the use of leveraged ETFs. This case was settled for approximately $2.3 million in damages.


• In June 2010, an attorney, on behalf of a customer, alleged that Douglas Lamb made highly unsuitable investment recommendations. The customer also believed that their accounts were not properly diversified and that Douglas Lamb churned their accounts to generate commissions for himself.


• In December 2015, Douglas Lamb was officially sanctioned by FINRA. The findings in this matter describe his involvement in his unsuitable trading of leveraged ETFs. Due to these alleged actions, he was suspended from the securities industry for two months and fined $5,000 in damages.

Leveraged ETFs

An ETF, or an Exchange Traded Fund, is a product that encompasses multiple securities that directly mirrors a particular index. The ETF then adjusts identically to whatever the value of the index changes to. A leveraged ETF, on the other hand, operates differently. Leveraged ETFs use borrowed funds and/or derivatives like options or futures in an attempt to boost customer returns. It is presented to potential investors as a way for investors to receive gains higher than what the actual index has grown to. For instance, a customer might have purchased a  leveraged ETF following a particular index. That index then increases by 2 percent. A regular ETF would also increase by 2 percent; however, a leveraged ETF would go even higher. However, a crucial detail that many securities brokers leave out is the fact that a leveraged ETF can also work to the customer’s dismay should the index go down. Essentially, their losses are multiplied to the same extent their gains would have been. Leveraged ETFs are also never suitable for long term trading. These products are designed to be bought and sold within a single trading day due to the fact the securities are reset daily. If a leveraged ETF is held by an investor for a long period of time, even if the index is higher in value than it was when the product was originally purchased, the investor can still experience significant losses.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Douglas Lamb, please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.