William Thurmond Allegedly Over-Concentrates A Customer’s Account In Unsuitable Leveraged ETFs

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

William Thurmond operated most recently as a New York based securities broker. He worked in the securities industry for thirty-seven years. During his carer, he was registered with eight different securities firms.

His Registrations

• E.F. Hutton & Company (1979-1986)


• Dickinson & Co. (1985-1992)


• Americap Financial (1993-1994)


• Texas Securities (1992-1994)


• Signal Securities (1994-1995)


• Cullum & Sandow Securities (1995-1997)


• EDI Financial (1997-2016)


• Alexander Capital (2016-2017)

The Allegations

• In December 1986, a customer alleged that William Thurmond failed to rollover monies from a qualified pension fund upon early retirement into an IRA. This case was settled for $60,698 in damages.


• In July 1994, a customer alleged that William Thurmond engaged in deceptive trade practices in order to sell a bond to them. This case was settled for $50,000 in damages.


• In July 2014, a customer alleged that William Thurmond negligently handled their account, churned their account, made material misrepresentations, executed unauthorized trading, violated the Texas Securities Act, engaged in common law fraud, and breached his fiduciary duties. This case went to arbitration where the customer was awarded an undisclosed amount in damages.


• In April 2019, William Thurmond was sanctioned by FINRA. The findings in this matter state that he recommended highly unsuitable leveraged, and inverse leveraged, ETFs, also known as Exchange Traded Funds, to one of his customers. Thurmond allegedly executed forty-five leveraged ETF trades in this customer's account for a total of $328,000. According to the findings, the first eighteen of these transactions were executed without the customer's authorization. These investments were deemed unsuitable as they went against the customer's risk tolerance, financial needs, and investment experience. Due to the unsuitable nature of these investments, the customer suffered losses of $212,731, while Thurmond generated $42,724 for himself in commissions. Due to these alleged actions, he was fined $25,000, forced to pay the entire $42,724 in disgorgement, and suspended from acting as a securities broker in any fashion for a period of fifteen months.

Leveraged Exchange Traded Funds

An Exchange Traded Fund is a product that purchases multiple securities to directly mirror a particular index. This means when the value of the index changes. The value of the ETF adjusts identically.

A leveraged ETF 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 leveraged ETF can also work to the customer's dismay should the index go down. This is because their losses are multiplied to the same extent their gains would have been.

Leveraged ETFs are never suitable for long term trading. These products are designed to be bought and sold within a single trading day due to the fact that leverage needs to be reset on a daily basis. 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 will still experiences 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 William Thurmond, please contact Oakes & Fosher for a free and private consultation.