variable annuity

Donnell Bowen Barred by FINRA for Altering Client Records

November 7, 2018 | by Staff Attorney

The investment fraud attorneys at Gana Weinstien LLP are currently investigating previously registered broker Donnell Bowen (Bowen). According to BrokerCheck Records held by the Financial Industry Regulative Authority (FINRA), Bowen has been subject to 13 customer disputes, one financial action, one regulatory action, termination from employment, and a civil lien. The majority of these disputes concern unauthorized changes and forgery of customer signatures on life insurance/variable annuity forms.

In December 2016, a customer alleged that Bowen forged the customer’s signature on nonvariable insurnace documents to convert the term life insurance policies into whole life insurance policies. The case was settled at $50.

Shortly after, in January 2017, Bowen was permitted to resign from Northwestern Mutual Investment Services LLC (Northwestern Mutual) while under investigation for alleged forgery of customer signatures on documents.

Gregory Hill Subject to Pending Complaint Over Annuity Sales

August 2, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating Royal Alliance Associates, Inc. (Royal Alliance) broker Gregory Hill (Hill). According to BrokerCheck Records, Hill has been subject to one pending customer dispute and tax lien. In addition, Hill has been subject to termination from employment. The majority of these concerns allege the firm’s failure to supervise.

In August 2017, a customer alleged that Hill’s firm of employment failed to supervise Hill’s inappropriate sale of a variable annuity to the customer. The client has requested $1,185,056 in damages. This dispute is currently still pending.

In addition, in December 2010, ING Financial Partners, Inc. terminated Hill for failing to report his three tax liens on the U4 form. Hill has also been subject to a tax lien. In June 2010, Hill incurred a tax lien of $86,263.

Dennis Travis Subject to Customer Disputes Over Unsuitable Variable Annuity Practices

June 22, 2018 | by Staff Attorney

Securities attorneys at Gana Weinstein LLP are investigating The O.N. Equity Sales Company (O.N. Equity Sales) broker Dennis Travis (Travis). According to BrokerCheck records, Travis has been subject to 6 customer disputes, one of which is still pending. The majority of these customer disputes involve the unsuitable recommendations of variable annuities. In addition, Travis has been subject to a regulatory action by The Financial Industry Regulatory Authority (FINRA) in which FINRA sanctioned Travis for various violations of the securities laws.

In November 2017, a customer alleged that Travis placed customer into a variable universal life (VUL) insurance policy that was unsuitable to customer investment needs. The customer has alleged $57,643.65 in damages. This dispute is currently still pending.

In addition, in November 2011, FINRA found that Travis placed discretionary trades in the subaccounts of his customers’ variable annuities without the written authorization or knowledge of his customers or his member firm. Travis did this in an attempt to “balance” the allocation of investments. Without admitting or denying the findings, Travis consented to the described sanctions and entry findings. He was fined $5,000 and suspended on December 2011 for 10 days.

New York Times Investigates Broker Walter Marino’s Annuity Sales

December 7, 2016 | by Staff Attorney

Our firm’s investment attorneys are investigating reports in a New York Times article and customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Walter Marino (Marino) currently associated with Benjamin Securities, Inc. (Benjamin Securities) alleging unsuitable recommendations to invest in variable products such as variable annuities and equity indexed annuities. According to brokercheck records Marino has been subject to seven customer complaints and three employment separations for cause.

According to the New York Times, Marino solicited teachers to invest in high cost low quality annuities with their retirement savings. The Legend Group was alleged to be the provider of the investments all these teachers held. The firm fired Marino on grounds other than the investment fee issue. According to Marino’s brokercheck records the cause of the separation was that Marino represented to the firm that an annuity investment was not a replacement when in fact the firm determined it was. Legend has stated that their investments and charges “were consistent with the firm’s policies.”

Variable annuities and equity indexed annuities are complex financial and insurance products. In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you. The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen. The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

James Noto’s Variable Annuity Sales Practices Lead to Customer Disputes

September 6, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker James Noto (Noto). According to BrokerCheck records Noto is subject to at least one regulatory sanction and seven customer complaints. The customer complaints against Noto allege securities law violations that claim unsuitable investments and lack of due diligence among other claims. Many of the more recent claims involve the sale of Variable Annuity products.

The most recent complaint was filed in March 2016, and alleged that James Noto, while employed at Summit Brokerage Services (Summit), recommended an unsuitable investment in a variable annuity. In 2015, another customer filed a complaint alleging that Noto made unsuitable investment recommendations.

Variable annuities are complex financial and insurance products. In fact, recently the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. Essentially, a variable annuity is a contract with an insurance company under which the insurer agrees to make periodic payments to you. The investor chooses the investments made in the annuity and value of your variable annuity will vary depending on the performance of the investment options chosen. The primary benefits of variable annuities are the death benefit and tax deferment of investment gains.

LPL Financial Broker Alfred Talens Accused of Selling Unregistered Securities

February 5, 2016 | by Staff Attorney

The investment fraud lawyers of Gana Weinstein LLP are investigating customer complaints and the termination by LPL Financial, LLC (LPL) of broker Alfred Talens (Talens). There is at least one customer complaint against Talens alleging that the broker made unsuitable investments in connection with the sale of a variable annuity. The customer also alleges that the broker sold an unregistered security and claimed damages of $500,000. The conduct allegedly engaged in by Talens is also referred to as “selling away” in the industry. It is unclear from public disclosures the nature of the outside business but Talens public disclosures disclose that the broker has outside business activities including Ascension Wealth Management, a DBA for insurance and tax preparation, and AWM Consulting.

In addition, there is one employment separation disclosed. LPL alleged that Talens violated firm policy regarding outside business activities and borrowed money from clients. Thereafter, FINRA sent Talens a request for documents and information which the broker refused to respond to. Accordingly, FINRA automatically barred Talens from the securities industry on July 7, 2015.

In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.

Broker Investigation: H. Beck’s Advisor Michael Child

December 22, 2015 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Michael Child (Child). There are at least 2 customer complaints against Child. In addition, there is one regulatory complaint and three employment separations disclosed. The customer complaints against Child allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, and unauthorized trading among other claims. One of the claims involves allegations around the recommendation of a variable annuity.

The regulatory action was initiated by the state of Utah in March 2012 and alleged that certain information on a suitability form was not current resulting in a fine and a 12 month probation. In 2008, Child’s brokerage firm, GunnAllen Financial, Inc. alleged that Child allowed a statutorily disqualified person to represent himself as being associated with the branch office.

Child entered the securities industry in March 1998. Since March 2008, Child has been registered with H. Beck, Inc. out of the firm’s Salt Lake City, Utah office location.

Broker Investigation: SagePoint Financial’s Scott Aabel

November 30, 2015 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are interested in speaking with clients of Scott Aabel (Aabel). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Aabel has been the subject of at least 10 customer complaints, one regulatory event, three judgment or liens, and three financial disclosures. The customer complaints against Aabel allege securities law violations that claim unsuitable investments and misrepresentations among other claims involving mostly variable annuity products.

In June 2009, a customer filed a complaint alleging $71,873 in damages stemming from a loss of a living benefit rider for an annuity contract. In September 2007, a customer complained that the performance and fees for a variable annuity were misrepresented to the customer leading to losses of $13,595.

Also in April 2012, the Florida Office of Financial Regulation Division of Securities filed an administrative complaint against Aabel alleging violations of the state’s code and imposed a fine of $70,000.

Customers File Complaints Against Eric Wegner Over Tenants-in-Common (TIC) Real Estate Investments

October 26, 2015 | by Staff Attorney

According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Eric Wegner (Wegner) has been the subject of at least 5 customer complaints and two financial disclosures. Customers have filed complaints against Wegner alleging a number of securities law violations including that the broker made unsuitable investments, misrepresentations, breach of fiduciary duty, and false statements mostly in connection with recommendations to invest in private placements such as tenants-in-common (TICs) interests. In addition, one complaint involves a dispute over a variable annuity recommendation.

Wegner entered the securities industry in 2000. From December 2002, until December 2008, Wegner was a registered representative with Sammons Securities Company, LLC. Thereafter, from January 2009, until February 2011, Wegner was associated with QA3 Financial Corp. From February 2011, until July 2013, Wegner was associated with Sigma Financial Corporation. Finally, Wegner is currently a registered representative with Cambridge Investment Research, Inc. out of the firm’s Delafield, Wisconsin office location.

TIC investments have led to devastating investor losses and are in almost all cases unsuitable products. The near certainty of failure of investing in TICs as a whole has led to the product virtually disappearing as an offered investment from most reputable brokerage firms. According to InvestmentNews “At the height of the TIC market in 2006, 71 sponsors raised $3.65 billion in equity from TICs and DSTs…TICs now are all but extinct because of the fallout from the credit crisis.” In fact, TICs recommendations have been a major contributor to bankrupting brokerage firms. For example, 43 of the 92 broker-dealers that sold TICs sponsored by DBSI Inc., a company whose executives were later charged with running a Ponzi scheme, a staggering 47% of firms that sold DBSI are no longer in business.

LPL Financial Fined $11.7 Million Over Securities Practices

June 15, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) entered into an agreement whereby the regulatory fined LPL Financial LLC (LPL) and fined it $10 million for broad supervisory failures in a number of key areas, including the sales of non-traditional exchange-traded funds (Non-Traditional ETFs), certain variable annuity contracts, non-traded real estate investment trusts (Non-Traded REITs) and other complex products, as well as its failure to monitor and report trades and deliver to customers more than 14 million trade confirmations. As part of the fine FINRA ordered LPL to pay approximately $1.7 million in restitution to customers who purchased non-traditional ETFs.

In a press release Brad Bennett, FINRA Executive Vice President and Chief of Enforcement, stated that “LPL’s supervisory breakdowns resulted from a sustained failure to devote sufficient resources to compliance programs integral to numerous aspects of its business. With today’s action, FINRA reaffirms that there is little room in the industry for lax supervision and that it will not hesitate to order firms to review and correct substandard supervisory systems and controls, and pay restitution to affected customers.”

This action is only one of many regulatory actions that our firm has tracked concerning LPL and its brokers including the following: