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.
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