Investor Contends Insigneo Securities Broker Unsuitably Handled Account
A former customer of Felipe Henao Vargas, an Insigneo Securities stockbroker, is pursuing a Financial Industry Regulatory Authority (FINRA) arbitration claim against the brokerage firm for $1.3M in damages related to the iPath Series B S & P 500 Short Term Futures ETN (VXX). Henao is also a registered investment advisor with Global Investor Advisory Services, LLC in Miami, Florida.
The investor said that Henao had placed a short-term trade for 20,000 of the Barclays exchange-traded note (ETN) in late February 2020 in the investor’s account and then made another trade a few weeks later to cover the short. The claimant reportedly wrote an email expressing concerns over the brokerage account’s performance, which had depreciated in value, and Henao’s lack of communication.
If Insigneo Securities broker Felipe Henao Vargas recommended the Barclay’s iPath Series B S & P 500 Short Term Futures ETN or another investment to you, and you suffered significant losses, contact our securities fraud attorneys at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today so that we can help you explore your legal options.
Barclays Bank iPath Series B S & P 500 Short Term Futures ETN
The iPath Series B S & P 500 Short Term Futures ETN is supposed to provide equity market volatility exposure to investors via the CBOE Volatility Index. It is an exchange-traded fund (ETF) that is inverse volatility-linked, high risk, complex, and unsuitable for the typical retail investors. This type of ETF renders a return when there is low volatility in the markets.
Records indicate that Henao made the short position in Barclay’s iPath Series B S & P 500 Short Term Futures ETN prior to COVID-19 striking. The pandemic proceeded to cause massive market volatility and the claimant’s account lost money. Henao then shorted another position for the investor that was significantly more expensive than the first.
Following a market drop, Henao had to cover the short position, purportedly costing the client way more than what was borrowed on margin. This allegedly led to a loss of $1.3M in just a few weeks.
As his current brokerage firm of record during the time of the trade at issue, Insigneo Securities could be held liable for the customer’s losses.
Margin Losses
When an investor borrows on margin, this means that the broker-dealer’s money was used to purchase securities. The securities in the customer’s account then become collateral against the loan. Meanwhile, the brokerage firm is entitled to sell the securities to pay down the loan without notifying the investor.
Should the securities plunge too low in value that they no longer have any worth, the investor may find themselves owing money to the firm.
This Barclay’s iPath Series B S & P 500 Short Term Futures ETN investor claim, brought in September 2020, is the first customer dispute noted on Felipe Henao Vargas’s BrokerCheck record. Henao has worked 13 years in the industry. Other firms he was previously registered with include HB Asset Management, Bolton Global Asset Management, and Merrill Lynch, Pierce, Fenner & Smith.
For investors in Miami and the surrounding areas, contact our Florida broker fraud attorneys at 818-560-2992.
SSEK Law Firm also has other offices all over the US and we represent investors nationwide. Call 800-259-9010. We have helped thousands of individual investors, high net worth individual investors and institutional investors recover their losses.