The suitability of leveraged and inverse exchange-traded funds climbed on FINRA’s Enforcement hit list in 2012, according to Partners Deborah Heilizer and Brian Rubin and Associate Andrew McCormick of law firm Sutherland Asbill & Brennan’s, in their annual review of the regulatory agency’s disciplinary actions.

Leveraged and inverse ETFs fall under the umbrella of complex products that FINRA made a focus in 2012. In 2011, FINRA had only four cases involving ETFs, resulting in $123,000 in fines. The numbers of those cases jumped to 9 in 2012, resulting in $7.6 million in fines, an increase of 125% in cases and 6000% in fines.

Heilizer, Rubin and McCormick attribute the astronomical increase in fines to four cases involving leveraged and inverse ETFs sold to conservative investors without sufficient due diligence review. These four cases each amounted to fines of over $1.5 million.