A Financial Advisor Allegedly Sold Elderly Clients Leveraged ETFs. The SEC Is Fining Him and His Former Firm $700,000. -- Barrons.com

By Kenneth Corbin

The Securities and Exchange Commission has fined United Planners and one of its former investment advisors $700,000 for allegedly breaching their fiduciary duty by placing dozens of clients in leveraged exchange-traded funds, complex products meant to be held for short time periods by traders. The SEC says that the clients, many of whom were elderly retirees, lost about 70% of their investment in the funds.

United Planners and the former advisor, Cary Urich, settled the allegations without admitting or denying wrongdoing. The SEC fined the firm $600,000 and Urich $100,000. It also suspended the advisor for two years.

A spokesman for United Planners didn't immediately respond to requests for comment. Urich didn't immediately respond to a request for comment through social media. Court records don't identify a lawyer who represented him in the SEC case. A receptionist at Vanderbilt Securities, where Urich has been registered since 2024, didn't provide a phone number for the South Carolina branch office where Urich worked and a Vanderbilt representative didn't immediately respond to a request for additional comment.

More than 50 clients. The SEC alleges that from April 2020 through November 2023 Urich invested 54 clients, nearly his entire book of business, in four leveraged and inverse ETFs and one leveraged ETF. These products are typically meant to be held for one day, and commonly warn in their prospectuses of the high likelihood of losses if they are held for longer periods. The SEC says that Urich held his clients' assets in the leveraged ETFs for an average of 798 days.

The SEC alleges that Urich breached his fiduciary duty by using his discretionary authority over clients' accounts to invest them in products that didn't match their objectives or risk tolerances. It further alleges that he ignored the warnings contained in the funds' prospectuses as well as the guidance that regulators have issued on leveraged ETFs.

The average age of the clients who were impacted by the leveraged ETFs was 71, according to the SEC, which says that many of the investments were made using funds in their retirement accounts. Additionally, the SEC alleges that Urich heavily concentrated his clients' holdings in the leveraged products, which accounted for an average of 60% of their account balances, with the remainder primarily held in cash or cash equivalents.

Short and short term. Leveraged ETFs aim to outperform an index or stock by a specific multiplier, commonly 2x or 3x. Inverse leveraged funds, sometimes called short funds, seek to deliver the opposite performance of a stock or fund. Both funds typically aim to reach their objective on a single day and are reset daily, meaning that over time they can diverge sharply from the performance of the index or stock they track. They are generally seen as a tactical play to gain amplified exposure to a given asset.

The commission alleges that United Planners failed to adequately supervise Urich and ensure that clients received disclosures that the leveraged funds weren't being used within the recommended short-term holding period.

In 2022 and 2023, United Planners issued three compliance memos to its advisors cautioning them about leveraged and inverse ETFs, including one that cited an SEC enforcement action alleging a breach of fiduciary duty relating to leveraged and inverse ETFs, according to the order detailing the settlement. "As the SEC stated in its order, holding leveraged ETFs for more than a single day can result in breach of an adviser's fiduciary duty," United Planners wrote in bold face in the memo, the SEC says.

In early 2020, United Planners reviewed Urich's trading activity, focusing on the extended holding periods of the leveraged ETFs and the high concentration of clients in those assets, but ultimately took no action, the SEC says. It wasn't until November 2022, after a client filed an arbitration claim against Urich and the firm, that United Planners prohibited Urich from purchasing leveraged ETFs on behalf of his clients, but it didn't require him to sell those positions that his clients already held, according to the order.

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November 03, 2026 15:29 ET (20:29 GMT)