Comprehensive Asset Management and Servicing Inc. (“CAMS”) has agreed to pay $475,000 to settle claims that the firm failed to reasonably supervise representatives’ sales of variable annuities, among other complaints.
From February 2008 and 2012 the New Jersey broker-dealer “failed to establish, maintain and enforce a supervisory system and procedures reasonably designed to supervise variable annuity transactions,” according to FINRA.
Particularly, the firm failed in a number of instance to acquire customer information–including ages, investment experience and objectives–for a satisfactory review of variable annuity transactions. CAMS further failed to implement controls so variable annuity applications were forwarded promptly to a principal for approval and failed to produce evidence of prospectus delivery.
“For years now, we have had a new system and controls in place to supervise the processing of variable annuities,” said Timothy Smith, president of parent company The Comprehensive Group. “We note specifically that FINRA did not find that any variable annuity trades for clients during that time were unsuitable, just that our system of supervision needed to be enhanced, which as indicated was done quite a while ago.”
In addition to the variable annuity allegations assessed to CAMS, the settlement amount covers a few other alleged rule violations related to supervisory obligations, such as review and retention of consolidated reports; review and retention of e-mail; and private securities transactions.
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