A former Morgan Keegan registered rep agreed to be barred permanently from the industry for putting 10 of his middle-class clients into “unsuitable” investments –- highly leveraged ETFs, regulators said.

According to FINRA, Michael Venable of Tyler, Texas, made unsuitable investments for “unsophisticated clients with conservative investment objectives and risk profiles” by putting them in Direxion ETFs, some of which short various market segments. Half of those accounts traded Direxion on margin -- a fact many of the investors had not been told about. The investors ranged in age from 40 to 91, some with incomes as low as $25,000.

Reached by phone, Venable said he had no comment. The FINRA judgment forbids Venable from speaking publicly about or contradicting any of the facts in the case.

The regulatory punishment quotes directly from the Direxion prospectus which cautions: “The funds are not suitable for all investors.” It adds that the funds should be used by sophisticated investors who understand the risks of leverage, daily trading and short selling.

Venerable also engaged in excessive trades, FINRA ruled, which generated high commissions. For example, in one client account with an average monthly balance of $17,000, Venable’s trading generated $9,600 in commissions.

“As a result, the account had an annualized cost-to-equity ratio of approximately 140%,” the FINRA ruling states. “Thus the [clients’] account investment of $17,000 would have to appreciate 140% to cover the commissions charged to the account.” Venable also was found to have kept inaccurate and inadequate records.

Morgan Keegan terminated Venable’s employment on April 15, 2010, according to FINRA. A spokesman for Morgan Keegan said the company would have no comment.

Ann Marsh writes for Financial Planning.