Over the last 12 years, Oakes & Fosher has tried and won more FINRA arbitration cases on behalf of individual investors than any other law firm in the country.

*Past results do not guarantee a similar outcome. The choice of a lawyer is an important decision and should not be based alone on prior results.

AdobeStock 40515377

The law firm of Oakes & Fosher is presently investigating the possible misconduct of securities broker John Tao. According to his publicly available FINRA BrokerCheck report, John Tao has been the subject of multiple customer disputes.

John Tao is a Florida based securities broker. He has worked in the securities industry for seventeen years. During his career, he has been registered with three different securities firms.

His Registrations

  • Baraban Securities (1995)
  • IDS Life Insurance Company (2002-2006)
  • Ameriprise Financial Services (2002-Present)

The Allegations

  • In October 2012, an attorney on behalf of a customer alleged that they experienced losses due to speculative trades and margin interest.
  • In June 2018, a customer alleged that John Tao recommended he invest in five unsuitable leveraged ETFs. This case was settled for $43,000 in damages.

Leveraged ETFs

An ETF, or Exchange Traded Fund, is a security that directly mirrors a particular index. When the value of said index changes, the value of the ETF adjusts identically. A leveraged ETF works differently. These products use derivatives like options or futures to boost investor returns. Securities brokers, like John Tao, market these products to investors as a way to see returns higher than what the actual value of the index has grown to.

For example, say that the index that a leveraged ETF follows increases by 2 percent. A regular ETF would also increase by 2 percent; however, a leveraged ETF would increase even higher. A fact that many securities brokers leave out is how detrimental these products can be should the value of the index go down. Just like the gains are multiplied should the value of the index increase, the customer’s losses are also multiplied should the value of the index go down.

These products can be highly unsuitable when held onto for longer periods of time. They were designed to be bought and resold within a single trading day. This is due to the fact that leverage is reset on a daily basis. Essentially, the investor’s losses or gains are dependent upon how many successful trading days occurred while they held the leveraged ETF, not what the value of the product has risen or fallen to since the product was originally purchased. If an investor holds a leveraged ETF for a long period of time, they may still experience losses even if the value of the index is higher than it was when they originally purchased the product.

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 John Tao, 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.