A Registered Rep in Waunakee, Wisconsin, agreed to a $15K fine and 30-day suspension to settle several FINRA charges relating to his marketing and execution of ETFs in a managed joint account for public customers. 

    Unauthorized Discretion.  RR Kallies allegedly executed the purchase without the customers’ knowledge or consent, and without having obtained the customers’ prior written authorization to exercise discretion and his firm’s prior written acceptance of the account as discretionary.

    Unapproved Sales Literature.   RR Kallies made a presentation consisting of several slides to the customers in connection with an investment strategy program he was recommending, and which FINRA considered "sales literature."  However, the RR allegedly made the presentation without receiving prior approval from the firm and without having it filed with FINRA within 10 business days of its first use.

The presentation was further faulted for:  (i) generally failing to disclose the risks of investing in the securities that were discussed;  (ii) failing to disclose the general risks associated with investing in mutual funds and ETFs;  and, (iii) failing to disclose the heightened risk of investing in inverse types of ETFs.  FINRA's specific allegations:

•  Because the presentation lacked certain disclosures, it was not fair and balanced, and didn't provide the investor with a sound basis for evaluating facts in regard to a particular security or service. 
• The slides contained unwarranted and/or misleading information - i.e., charts in some slides failed to include the total annual fund operating expense ratio, a prospectus offer and standardized average annual total returns for 1-5-10 years;  instead, they included the annualized rates of return, which is considered non-standardized performance and must be accompanied by the standardized performance listed.
• The charts in some slides also failed to include the performance disclosures required by SEC Rule 482(b)(3);  these disclosures generally require that the sales material disclose that the performance data quoted represents past performance, that past performance does not guarantee future results and that performance may be lower or higher.

This is FINRA Case #2009016654401.   [FINRA March Disciplinary Actions]