Because fixed annuities and fixed life insurance are not securities, many broker-dealers treat the sales of these products by their registered reps as outside business activities. In that event, there is no obligation by the BD to supervise those sales, and they can be run directly with the issuing company and not through the broker-dealer. … Continue Reading
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Supervision Requires More Than Trust; It Means Trust With Verification
Posted in annuities, Compliance, SupervisionBack in December, the State of Massachusetts filed a Complaint against LPL and one of its big producers alleging that the producer, Roger Zullo, defrauded his clients and lied to his supervisors in connection with the sale of variable annuities. What struck me when I read the Complaint, and what has still stuck with me,… Continue Reading
Altering Documents In A FINRA Arbitration Can Have Consequences That Go Well Beyond The Arbitration Itself…At Least For Respondents
Posted in annuities, Arbitration, Disciplinary Process, Discovery, Enforcement, FINRAThe FINRA investigative process and the arbitration process exist side-by-side; at times, the misconduct that is alleged by a claimant in a Statement of Claim may simultaneously be the subject of an examination by Member Regulation, or even an Enforcement Complaint. Ordinarily, Enforcement doesn’t pay much attention to what happens in a parallel arbitration, except… Continue Reading
Good Grief! MetLife Agrees To $20 Million Fine, And Another $5 Million In Restitution! For Negligence!
Posted in annuities, Disciplinary Process, Enforcement, FINRA, Suitability, SupervisionFINRA announced today that it entered into a settlement with MetLife Securities, Inc. in which MetLife agreed to pay FINRA a $20 million fine and its customers up to $5 million in compensation for, basically, making misrepresentations over a five-year period to customers who replaced one variable annuity with another regarding the costs of making… Continue Reading
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