NEXT Financial - Law Offices of Robert Wayne Pearce

NEXT Financial Representative Suspended for Misrepresenting a Variable Annuity Investment

Dion Rey Padilla, of San Antonio, Texas, submitted an Offer of Settlement to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly making an unauthorized purchase of a variable annuity for a customer and misrepresenting to the customer on numerous occasions that it was not a variable annuity. FINRA found that, while employed by NEXT Financial Group, Inc., Dion Padilla misrepresented a variable annuity investment to his customers, who stressed to him that they did not want any of their funds invested in a variable annuity due to the fees and their desire for liquidity. Mr. Padilla allegedly presented a variable annuity application to the customer, assuring him that it was not for a variable annuity, but a type of managed money investment. Mr. Padilla’s misrepresentations, however, were false and misleading.

Mar 15, 2016

NEXT Financial Broker Fined by FINRA for Unsuitable Bond Recommendations

Betsy Bratton Marcom, a former Registered Representative with the Georgetown, Texas branch of NEXT Financial Group, Inc. (NEXT Financial), submitted a letter of Acceptance, Waiver, and Consent in which she consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that she made unsuitable investment recommendations to her customer which resulted in approximately $135,000 in realized losses. FINRA’s findings state that Betsy Marcom, of Georgetown, Texas, recommended that her client, a non-profit parish church, invest almost its entire portfolio in non-investment grade corporate bonds. Her recommendation was inconsistent with her client’s investment objectives and risk tolerance. According to FINRA, Betsy Marcom was a member of her client’s Finance Council and recommended that the council begin investing in non-investment grade bonds in order to generate a larger return in their account. Relying on the expertise of Ms. Marcom, the church’s account became increasingly concentrated in the bonds, reaching as much as 99% of the account’s assets. As a result of Ms. Marcom’s unsuitable recommendations, her client had invested over $700,000, approximately 45% of its liquid assets, in non-investment grade bonds in the NEXT Financial account, with realized losses of approximately $135,000.