Raymond Smith Suspended over ETN Strategy
Raymond Smith (CRD# 731506), a broker registered with Smith Brown & Groover, failed to supervise the recommendation of exchange-traded notes, according to a recent disciplinary action. MDF Law is investigating the Macon, Georgia-based financial professional for similar conduct. Current or former clients with concerns about their accounts are encouraged to reach out for a free consultation.
To learn more about Mr. Smith’s disciplinary history, continue reading this post. This post is sourced from a February 26, 2025 review of his BrokerCheck profile, a Financial Industry Regulatory Authority record.
Sanction Alleges ETN Failures
On November 6, 2024, FINRA released a Letter of Acceptance, Waiver, and Consent (# 2019063352402) outlining its disciplinary action against Mr. Smith. As it alleges, he developed an exchange-traded note trading strategy that his firm then recommended to customers. However, according to FINRA, he and the firm recommended the strategy “without fully understanding” its risks and features and “without having a reasonable basis to recommend the strategy to any customer.”
FINRA explains further that the ETN’s offering materials disclosed that it may not be suitable for investors who intended to hold it for longer than a single day. It also disclosed that investors could potentially lose their entire investment in the event of a volatility spike. In spite of this, FINRA found, Mr. Smith and the firm “invested customers in the ETN for extended periods of time, an average of 72 days, including through periods of high volatility.” They also allegedly “conducted flawed testing” of the strategy. Customers who invested in the ETN “suffered near total losses on their investments,” and the firm stopped offering it.
FINRA Fined Raymond Smith $15,000
Based on these and other findings, FINRA concluded that Mr. Smith and he firm failed to reasonably supervise the strategy’s suitability. Not only did the firm lack any policy or procedure for assessing the suitability of the product, it also lacked any procedures to determine whether “whether customers’ concentration in the strategy created a risk of loss inconsistent with the customers’ investment profiles.” As the AWC Letter notes, Mr. Smith himself “was the firm’s only principal and solely responsible for its supervision.” Consequently, it imposed a fine of $15,000 and a six-month suspension from registering with any member firm in all capacities.
Firm Settled ETN Disputes for $1.1 Million
Between February and October 2019, three parties of investors filed disputes involving Mr. Smith. These claims included allegations of misrepresentation, negligence, unsuitable recommendations, supervisory failures, and more. They stemmed from ETN and other investments, as his BrokerCheck record reflects. His former member firm settled the disputes for a total of $1,111,906.
FIRNA: Broker Based in Macon, Georgia
Mr. Smith started working as a broker in 1981, when he registered with Smith Brown & Groover. He has remained at the firm ever since, working at its office in Macon, Georgia. Boasting 43 years of experience as a broker, he has completed 12 industry exams, including the Series 53 and the Series 24.
Call MDF Law for a Free Consultation Today
MDF Law’s seasoned investment fraud attorneys have recovered more than $100 million our clients’ losses. If you have concerns regarding ETNs or other investments recommended by Raymond Smith, contact us to discuss your options. Our team offers free consultations across the US. Your time to pursue damages may be limited, so call 800-767-8040 today to speak with an attorney.