"We are pleased to have this matter resolved," Liz Fogarty, a Citigroup spokeswoman, said in an e-mailed statement.
Finra said each of the four firms sold "billions of dollars of these ETFs to customers, some of whom held them for extended periods when the markets were volatile."
Differing Returns
In its warning to brokers, Finra cited the differing returns of the Dow Jones U.S. Oil & Gas Index, which gained 1.6 percent between Dec. 1 and April 30, and the ProShares Ultra Oil & Gas ETF, which seeks to deliver twice the index's daily return. The fund fell 5.6 percent, including reinvested dividends, in the same period.
Leveraged and inverse ETFs in the U.S. hold $29.3 billion, according to data compiled by Bloomberg. Bethesda, Maryland- based ProShare Advisors is the largest provider with about $22.2 billion under management. ETF providers, unlike mutual fund sponsors, don't sell shares directly to retail investors.
The fines don't apply to the sale of exchange-traded notes. Finra is examining how those securities are being marketed after a Credit Suisse AG's volatility ETN lost half its value in two days. ETNs are backed by the issuer's credit, unlike exchange- traded funds, which holds assets.