Morgan Stanley’s brokerage arm will pay nearly $8 million to settle Securities and Exchange Commission’s charges that it falsely advertised a single inverse exchange-traded fund to investors who experienced losses after holding the securities long-term.

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Morgan Stanley Smith Barney LLC admitted that it failed to adequately implement its policies and procedures to make clear to clients the risks involved with purchasing inverse ETFs. Unlike a normal index fund, inverse ETFs are designed to profit from the decline in the value of an underlying benchmark. Investing in inverse ETFs is similar to holding various short positions, or using a combination of advanced investment strategies to profit from falling prices.

The SEC alleges that during the investment presentation, customers weren’t told that the funds’ performances often differ dramatically from the indexes they track. Morgan Stanley also failed to obtain a signed disclosure notice from clients. This disclosure typically states that such instruments may be unsuitable for investors planning to hold them longer than one trading session unless used as part of a trading or hedging strategy.

“Morgan Stanley solicited clients to purchase single inverse ETFs in retirement and other accounts, the securities were held long-term, and many of the clients experienced losses,” the SEC said.

Among other compliance failures, the SEC alleged that Morgan Stanley failed to monitor the inverse ETF positions on an ongoing basis and also did not conduct risk reviews to evaluate the suitability of the product for each advisory client.