First Allied Securities - Law Offices of Robert Wayne Pearce

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.

Oct 23, 2015

12 More Independent Broker Dealers Fined by FINRA for Failing to Give UIT Discounts to Investors

The Financial Industry Regulatory Authority (FINRA) fined a dozen independent broker-dealers (IBDs) for failing to give their clients the proper discounts available to them, known as breakpoint discounts, on sales of unit investment trusts (UITs). They were also cited for related supervisory failures. Some of the biggest fines were levied against First Allied Securities Inc. (First Allied), Fifth Third Securities Inc. (Fifth Third), Securities America Inc. (Securities America), Cetera Advisors LLC (Cetera Advisors), and Park Avenue Securities LLC (Park Avenue). FINRA ordered the 12 firms to pay both fines and restitution totaling $6.7 million. The other firms sanctioned were: Commonwealth Financial Network (Commonwealth Financial), MetLife Securities Inc. (MetLife), Comerica Securities (Comerica), Cetera Advisor Networks LLC, Ameritas Investment Corp. (Ameritas), Infinex Investments Inc. (Infinex), and The Huntington Investment Company (Huntington Investment).

Aug 7, 2015

First Allied Representative Daniel Grieco Suspended by FINRA

Daniel Grieco of Middletown, New Jersey submitted a Letter of Acceptance, Waiver and Consent (AWC), without admitting or denying the findings, to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly recommending trades to customers without having reasonable grounds to believe the investments were suitable. Grieco entered the securities industry in 1983 and has been registered as a General Securities Representative at FINRA member First Allied Securities, Inc. since August 2010. FINRA found that between July 21, 2008 and July 19, 2013, Grieco recommended and caused to be executed transactions of various leveraged and inverse-leveraged ETFs in 15 customer accounts. The ETFs were designed to achieve their designed to achieve their objectives over the course of one day. However, the ETF were held for much longer periods, in some cases for more than five years. FINRA alleged that Grieco, in extending the holding period of the ETFs, failed to appreciate the nature of the ETFs at the time of his recommendations, to wit, that they were not designed to achieve their objectives for extended holding periods. Therefore, FINRE concluded that Grieco did not have reasonable grounds to believe his recommendations were suitable and thereby violated NASD Rules 2310 and 2010.

Nov 21, 2014

FINRA Fines and Suspends Herbert Kaye for Discretionary Trade Violations and Unsuitable Recommendations

Herbert Leonard Kaye, a Delray Beach, Florida based broker with First Allied Securities, Inc. (First Allied), submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he entered discretionary trades in a customer’s account without the necessary prior written customer authorization. FINRA found that although Herbert Kaye had the verbal consent of his customer, he neglected to obtain the necessary written consent when he entered over 2,000 trades in equities and exchange traded funds (ETFs) in the customer’s account and generated over $173,000 in commissions. FINRA’s findings state that Herbert Kaye also recommended that his customer invest $1.1 million in a gold and precious minerals mutual fund, for which he received $11,000 in gross commissions. This mutual fund recommendation was unsuitable in light of the customer’s age, investment objectives, and the fact that Herbert Kaye allegedly knew that his customer wanted to avoid investments with large market fluctuations.