Brokerage Firms In The News - Law Offices of Robert Wayne Pearce

Nov 21, 2016

VSR Financial Services Fined for Variable Annuity Supervisory Failures

VSR Financial Services, Inc., headquartered in Overland Park, Kansas, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuities, specifically L-share variable annuities. Registered with FINRA since 1984, VSR Financial Services currently has 215 registered representatives and 58 branch offices. FINRA found that from January 2013 to December 2014, VSR Financial Services failed to establish, maintain, and enforce an adequate supervisory system to identify red flags related to the sale of L-share variable annuities. Additionally, FINRA found that VSR Financial Services failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that VSR Financial Services allegedly failed to provide its registered representatives with appropriate guidance to discern this class of investor.

Nov 18, 2016

Summit Brokerage Services Fined for Variable Annuity Supervisory Failures

Summit Brokerage Services, Inc., headquartered in Boca Raton, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuities, specifically L-share variable annuities. Registered with FINRA since 1994, Summit Brokerage Services currently has 864 registered representatives and 428 branch offices. FINRA found that from January 2013 to December 2014, Summit Brokerage Services failed to establish, maintain, and enforce an adequate supervisory system to identify red flags related to the sale of L-share variable annuities. Additionally, FINRA found that Summit Brokerage Services failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that Summit Brokerage Services allegedly failed to provide its registered representatives with appropriate guidance to discern this class of investor.

Nov 16, 2016

First Allied Securities Fined for Variable Annuity Supervisory Failures

First Allied Securities, Inc., headquartered in San Diego, California, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuities, specifically L-share variable annuities. Registered with FINRA since 1994, First Allied Securities currently has 1,119 registered representatives and 491 branch offices. FINRA found that from January 2013 to December 2014, First Allied Securities failed to establish, maintain, and enforce an adequate supervisory system to identify red flags related to the sale of L-share variable annuities. Additionally, FINRA found that First Allied Securities failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that First Allied Securities allegedly failed to provide its registered representatives with appropriate guidance to discern this class of investor.

Nov 14, 2016

Cetera Financial Specialists Fined for Variable Annuity Supervisory Failures

Cetera Financial Specialists, LLC, headquartered in Schaumburg, Illinois, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuities, specifically L-share variable annuities. Registered with FINRA since 1982, Cetera Financial Specialists currently has 1,580 registered representatives and 1,009 branch offices. FINRA found that from January 2013 to December 2014, Cetera Financial Specialists failed to establish, maintain, and enforce an adequate supervisory system to identify red flags related to the sale of L-share variable annuities. Additionally, FINRA found that Cetera Financial Specialists failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that Cetera Financial Specialists allegedly failed to provide its registered representatives with appropriate guidance to discern this class of investor.

Nov 9, 2016

Cetera Advisor Networks Fined for Variable Annuity Supervisory Failures

Cetera Advisor Networks, LLC, headquartered in El Segundo, CA, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuities, specifically L-share variable annuities. Registered with FINRA since 1983, Cetera Advisor Networks currently has 3,048 registered representatives and 1,209 branch offices. FINRA found that from January 2013 to December 2014, Cetera Advisor Networks failed to establish, maintain, and enforce an adequate supervisory system to identify red flags related to the sale of L-share variable annuities. Additionally, FINRA found that Cetera Advisor Networks failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that Cetera Advisor Networks allegedly failed to provide its registered representatives with appropriate guidance to discern this class of investor.

Nov 7, 2016

Voya Financial to Pay $2.75 Million for Variable Annuity Supervisory Failures

Voya Financial Advisors, Inc. of Des Moines, Iowa submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the sales of variable annuity L-shares. Voya Financial Advisors (Voya Financial) was subject to a similar FINRA disciplinary action in 2015 which alleged the firm failed to supervise the sales of Unit Investment Trusts (UITs). Registered with FINRA since 1968, Voya Financial, f/k/a ING Financial Partners, Inc., currently has 2,779 registered representatives and 1,485 branch offices. FINRA found that from July 2012 to August 2014, Voya failed to establish, maintain, and enforce a supervisory system to identify red flags in the sale of variable annuity L-shares. Further, FINRA found that Voya failed to provide its registered representatives with adequate training and guidance on suitability considerations for these multi-share class variable annuities. According to FINRA, the L-share annuities are a complex investment product that is only suitable for a narrow class of investors and that Voya allegedly failed to provide its advisors with reasonable guidance to discern this class of investor.

Oct 3, 2016

First Financial Equity and CCO Named in FINRA Complaint for Failure to Supervise Violations

Scottsdale, Arizona-based First Financial Equity Corporation (First Financial) and the firm’s Chief Compliance Officer (CCO), Melissa Ann Strouse, were named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that the firm failed to establish and maintain a proper supervisory system with respect to the appropriateness of fee-based accounts and the monitoring of accounts for potential churning and excessive trading. Melissa Strouse was named in FINRA’s complaint amidst allegations that as the firm’s CCO, she was responsible for ensuring the firm’s compliance with supervisory procedures. According to the FINRA complaint, First Financial Equity had inadequate written supervisory procedures (WSPs) with respect to the appropriateness of fee-based accounts for the firm’s customers and had no system in place to address situations where excessive fees may have been charged. Further, the Complaint alleges that First Financial failed to maintain and enforce a supervisory system related to its options business and that the firm allegedly had no WSPs for the supervision, approval and sale of exchange-traded funds (ETFs). For her part, the Complaint alleges that Melissa Strouse failed to ensure that the WSPs covered all required areas and were amended as needed.

Sep 23, 2016

Securities America to Pay More Than $1.5 Million in Restitution for Mutual Fund Overcharges

Securities America, Inc. has agreed to pay more than $1.5 million in restitution to customers who were overcharged in certain mutual fund purchases. According to the Financial Industry Regulatory Authority (FINRA), between July 1, 1009 and July 1, 2015, Securities America disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares of certain mutual funds without a front-end sales charge. The customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. According to the Letter of Acceptance, Waiver and Consent (AWC) submitted to FINRA, Securities America failed to reasonably supervise the application of the sales charge waivers to the eligible mutual fund sales, relying on its financial advisors to determine the applicability of sales charge waivers. Further, Securities America allegedly failed to adequately notify and train its financial advisors regarding the availability of mutual fund sales charge waivers for eligible customers. Without admitting or denying the findings, Securities America consented to the sanctions, was censured, and agreed to pay restitution to eligible customers who were overcharged of an estimated $1,541,419. This amount includes the approximately $1.3 million in mutual fund overcharges plus interest.

Sep 21, 2016

Summit Brokerage Fined for Failing to Apply Sales-Charge Discounts to UIT Customers

Summit Brokerage Services, Inc. (Summit) of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales-charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs) and for failing to establish, maintain, and enforce a proper supervisory system. Summit faced a similar FINRA disciplinary action in 2015 with regard to its supervision of non-traditional exchange-traded funds (ETFs). FINRA investigators alleged that Summit failed to apply sales charge discounts to certain customers’ eligible purchases of UITs. FINRA found that Summit failed to apply sales-charge discounts to 362 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $62,236.26. FINRA also alleged that Summit failed to establish, maintain, and enforce a supervisory system and written supervisory procedures (WSPs) reasonably designed to ensure that customers received sales-charge discounts to which they were entitled on UIT purchases. Summit’s WSPs did not even contain provisions specific to UIT discounts.

Sep 19, 2016

H.D. Vest Investment Services Fined for Failing to Report Customer Complaints

H.D. Vest Investment Securities, Inc. dba H.D. Vest Investment Services (H.D. Vest) of Irving, Texas submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to timely and/or accurately report customer complaints, and failing to adequately supervise variable annuity transactions to be sure the products were suitable for customers. FINRA alleges that during the period September 2012 through July 2015, H.D. Vest failed to accurately and/or timely report seven customer complaints in FINRA’s 4530 Complaint Reporting System. According to FINRA, H.D. Vest failed to accurately report three customer complaints by failing to select the most egregious problem code; identifying the wrong registered representative in its reporting of another customer complaint; and failing to timely report an initial customer complaint.