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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

What is a UIT, and why is the SEC sharply focused on this investment?

"The leopard doesn't really change its spots," says the critic of one so-called "IBD" (independent broker-dealer) entity that was recently slapped hard -- and for a second time -- by the Financial Industry Regulatory Authority.

FINRA's concern with Berthel Fisher & Co. Financial Services Inc. this time around is with an investment product commonly referred to in shorthand form as a UIT.

Federal securities regulators are looking closely at unit investment trusts these days out of a belief that these vehicles -- which are essentially a mixture of actively managed funds with a fixed portion of income-based securities (think bonds) -- have propensity for being abused by unscrupulous brokers offering them to consumers.

The chief concern -- and one which played out with Berthel -- is that UITs that are traded over the short term often result in a denial of meaningful "breakpoint" discounts for holders. Moreover, retrading then triggers sales charges for clients, thus yielding a double whammy for them. And brokers who pull triggers on UITs gain commissions through premature and large-volume trading.

Berthel was punished three years ago by a $775,000 fine levied by FINRA for the alleged failure of its managers to adequately supervise rogue brokers/traders of real estate investment trusts and other leveraged products.

And FINRA is now alleging a similar supervisory failure regarding UITs, with regulators contending in a civil lawsuit that at least one former broker shortchanged company clients by managing their UIT accounts inappropriately. In doing so, Berthel and that individual amassed hundreds of thousands of dollars in commissions.

One national media report on Berthel and its UIT involvement stresses the incongruity in a company that was recently called to task by FINRA for lax supervision of investment offerings being singled out once again shortly thereafter for a further and closely similar lapse in broker oversight.

The penalties meted out to Berthel this time around could render the earlier fine that was levied insignificant by comparison.

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