Posted in: Variable Annuities |
Last month, FINRA announced they would be fining five firms for failing to supervise the sales of unsuitable variable annuities and mutual funds.
The firms were ordered to repay the clients’ money, and individual brokers involved are now under investigation.
Here is the bit of info from www.investmentnews.com on FINRA’s latest crackdown:
The five firms are Cleveland-based McDonald Investments Inc., which is now part of Zurich-based UBS AG; IFMG Securities Inc., which is now owned by LPL Financial of Boston; Wells Fargo Investments in San Francisco; PNC Investments LLC in Pittsburgh and WM Financial Services Inc., which is now part of Chase Investment Services Corp. in New York.
New York- and Washington-based Finra alleged that between June 2004 and January 2006, an ex-broker at McDonald made 32 unsuitable sales of variable annuities with enhanced death-benefit riders to 25 elderly customers. All of the customers were at least 78 years old and thus either too old for the rider or close to the age of ineligibility.
You can read the full article here.
This is yet another horrible reminder of how widespread this problem has been, not just in California. While it’s nice to see FINRA cracking down on some of the worst offenders, these are just some of many cases involving brokers who clearly misrepresented the terms of variable annuities, promising their customers a guaranteed rate of return in order to reap the commission fees.
In the case of this broker at McDonald, 32 customers were lied to. That’s 25 senior citizens were knowingly sold variable annuities that they were too old to even activate, which is essentially selling them something with no promised rate of return.
What’s worse, all this was done under firm supervision, for over a year.
If firms and banks can’t regulate their own, lawyers need to bring to light these sorts of misdeeds. If you or a family member has been victim of broker fraud, including the dishonest sale of variable life annuities, don’t hesitate any longer.
