Formal Complaint: Tidal Financial Group’s Gross Negligence and Failure of Due Diligence in Co-Issuing Defiance ETFs
Dear Sir or Madam,
I am writing to lodge a formal and serious complaint against Tidal Financial Group for its egregious failure to exercise proper oversight and due diligence as the co-issuer and service provider for multiple exchange-traded funds (ETFs) issued under the Defiance ETFs brand.
In recent months, Defiance has liquidated and delisted several of its ETFs shortly after launch—products that existed for only a matter of months before being abruptly terminated. These premature closures have caused significant financial harm to investors who relied on the apparent legitimacy conferred by Tidal’s involvement as the established, regulated partner in these issuances. As the experienced white-label ETF platform and co-issuer responsible for critical functions including regulatory compliance, operational infrastructure, and distribution support, Tidal had an unmistakable duty to rigorously vet the viability, strategy, and sustainability of these products before allowing them to reach the market under its umbrella.
Your company’s apparent willingness to attach its name and infrastructure to these offerings without adequate scrutiny constitutes a profound dereliction of responsibility. By failing to conduct thorough due diligence on Defiance’s strategies, risk management, and long-term feasibility, Tidal effectively enabled the launch of products that were doomed to rapid failure. This is not merely a lapse in judgment—it is regulatory negligence that undermines investor confidence in the ETF marketplace and exposes retail and institutional investors to unnecessary losses.
Tidal markets itself as a trusted partner that brings expertise and compliance rigor to newer or smaller issuers. Yet the repeated pattern of early Delistings from Defiance raises serious questions about whether any meaningful review took place at all. Investors understandably assume that a Tidal-backed ETF has passed a baseline standard of quality and oversight. Your failure to enforce that standard amounts to a betrayal of that trust.
I demand that Tidal Financial Group immediately:
Conduct a full internal investigation into its due diligence processes for all Defiance-issued ETFs and publicly disclose the findings.
Accept accountability for the role your negligence played in these failures and establish a remediation fund or other mechanism to compensate affected investors.
Implement substantial reforms to your vetting and ongoing monitoring procedures to prevent recurrence with any current or future issuer partners.
Provide a detailed written response to this complaint within 14 days, outlining the specific actions you intend to take.
Should I not receive a satisfactory response, I will escalate this matter to the U.S. Securities and Exchange Commission, FINRA, and other relevant regulatory authorities, and I will consider all available legal remedies.
Tidal’s reputation as a responsible platform is now in serious jeopardy. The investing public deserves far better than the careless oversight demonstrated in this case.
Sincerely,