SEC Halts Leveraged ETF Launches Over Risk Concerns

The U.S. Securities and Exchange Commission (SEC) has issued warnings to several prominent leveraged exchange-traded fund (ETF) providers, effectively delaying the launch of products promising double or triple daily returns on stocks and commodities. This action comes after nine near-identical warning letters were sent to companies like Direxion, ProShares, and Tidal on Tuesday. The SEC cited concerns over these funds’ potential for high risk exposure exceeding regulatory limits, urging fund managers to either adjust their investment strategies or withdraw their application submissions.