Summit Brokerage Services - Law Offices of Robert Wayne Pearce

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.

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.