Summit Equities, Inc., submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which it was fined $325,000 for failing to adequately supervise its registered representatives’ recommendations and sales of multi-share-class variable annuities.
Registered with FINRA since 1982 and headquartered in Parsippany, New Jersey, Summit Equities has approximately 132 registered representatives. FINRA found that from October 2011 to December 2015 (the relevant time period), Summit Equities sold 1,037 individual variable annuity contracts to its customers. Approximately 45% of those contracts were L-share contracts. FINRA found that Summit Equities failed to provide its registered representatives with proper training and guidance on suitability considerations for these variable annuities, which provide a shorter surrender period than B-share contracts, but have a higher fee in exchange for the increased liquidity. Without admitting or denying the FINRA findings, Summit Equities was censured and assessed a $325,000 fine.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise its representatives can bring forth claims to recover damages against firms, like Summit Equities, which have a duty to supervise its employees in order to protect customers’ interests.
Have you suffered losses in your Summit Equities account due to an unsuitable variable annuity investment? Did your stockbroker make an unsuitable recommendation that doesn’t fit with your investment goals? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Summit Equities stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Robert Wayne Pearce
Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.
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