Securities Lawyers Blog
The attorneys of the law offices of Gana Weinstein LLP are investigating a series of recently filed complaints against broker John Quintero (Quintero) who is currently a registered representative with Transamerica Financial Advisors. In January 2014, an investor filed a complaint alleging that Quintero misrepresented the premiums paid on a variable universal life insurance policy (VUL). Specifically, the customer claimed that Quintero stated that the premiums paid would be a tax differed investments and that further the sub-account investments were unsuitable.
VULs are complex insurance and investment products that investors must fully understand prior to investing. One feature of a VUL policy is that the investor can allocate a portion of his premium payments to a separate sub-account to invest and grow through mostly mutual fund investments. Monthly charges are assessed for the life insurance policy including a cost of insurance charge and administrative fees all of which are deducted from the policy’s cash value. The investor can suffer losses are receive gains based upon the performance of the sub-account investments. However, the VUL policy can terminate or lapses if at any time the net cash surrender value is insufficient to pay the monthly cost deductions. Upon termination of the policy, the remaining cash value becomes worthless.
Given the costs and premiums involved in purchasing VULs, brokers must be careful to ensure that the recommendation to invest in VULs is suitable for the client. In some cases, investors do not realize the huge expense of these policies and have no way to continue to cover the premiums. When this happens the policy could lapse over time.
More recently, another complaint was filed against Quintero in July 2014, where an investor alleged unsuitable investments that were based upon a loan. According to Quintero’s brokercheck, the investor claims that Quintero traded this loan investment on a discretionary basis in an account not held at Transamerica. The account employed a high risk options strategy to pay interest on the loan but ultimately ended in investment losses and interest expenses of approximately $818,000.
John Quintero has worked as a registered broker for Transamerica Financial Advisors since 2002. Before that Quintero was registered with Metlife Securities from 2001 to 2002.
Investors who have suffered losses in investments may be able recover their losses through arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors and determining when brokerage firms fail to supervise their representatives sale of unsuitable investments. Our consultations are free of charge and the firm is only compensated if you recover.