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FINRA December 2015 Disciplinary Actions: Part II

Wunderlich Securities, Inc. (Memphis, TN) submitted an AWC in which the firm was censured and fined $50,000. FINRA found that it failed to establish, maintain, and enforce an adequate supervisory system and written procedures regarding the preparation and dissemination of consolidated reports. The findings stated that although the firm’s WSPs expressly permitted the preparation and dissemination of consolidated reports, they did not adequately address how the firm would supervise the use of consolidated reports. The firm also failed to establish, maintain, and enforce an adequate supervisory system or written procedures to ensure the accuracy of any valuation information that was provided by a registered representative in a consolidated report and mandating the inclusion in consolidated reports of specific disclosures regarding the source and accuracy of any valuation information that was provided by a registered representative. In addition, the firm failed to establish, maintain, and enforce an adequate supervisory system and written procedures to ensure that supervisory reviews of consolidated reports were [...]

By |December 28th, 2015|FINRA, Press Releases & News|
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Broker-Dealer Settles Variable Annuity Case for $475k

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 [...]

By |December 15th, 2015|FINRA, Press Releases & News|
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FINRA Wants ‘Significant Fine’ From MetLife For Variable Annuity Sales

MetLife Inc., the biggest life insurer in the country, said that FINRA will seek a "significant fine" from the company's broker-dealer unit as part of an investigation into potential violations relating to variable annuities. MetLife stated that it is cooperating with the investigation. The examination centers on possible violations "regarding alleged misrepresentations, suitability, and supervision in connection with sales and replacements of variable annuities and certain riders on such annuities," according to MetLife. FINRA wants to protect against abuses in the sale of retirement and savings products. It told MetLife in late September that it would recommend disciplinary action. MetLife spokesman John Calagna stated, “We strongly disagree with the conclusions reached by FINRA, and we will defend ourselves vigorously.” If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

By |November 6th, 2015|FINRA, Press Releases & News|
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What Advisers Get Wrong About Variable Annuities

Both advisers and insurers believe that variable annuities with guaranteed benefit riders are the most complicated annuity products. Certain aspects of these annuity contracts can lead to misconceptions among advisers regarding how the products work and among customers regarding what they are purchasing. “A lot of the people selling these products simply don't fully understand it. And why don't they? Because they're so darn complex,” said Jim Shambo, president of Lifetime Planning Concepts. “I've never met a client who understands them, and I've never met a salesmen who fully understands them.” Variable annuities with guaranteed benefit riders offer consumers an income floor in the event markets perform poorly and allow for upside participation during up markets. Guaranteed lifetime withdrawal benefits ("GLWBs") are the most popular living benefit rider in variable annuity contracts, comprising over eighty percent of variable annuity sales in 2014. Shambo believes that one of the biggest reasons for adviser and customer confusion is a "two-bucket" concept. One [...]

By |October 19th, 2015|Uncategorized|
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