Securities Lawyers Blog
According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Francis Velten (Velten) has been the subject of at least eight customer complaints and one regulatory investigation over the course of his career. Customers have filed complaints against Velten alleging securities law violations including that the broker made unsuitable investments relating primarily to the sale of variable annuities.
Velten entered the securities industry in 1993. Since August 2006, Velten has been a registered representative of Summit Brokerage Services, Inc. out of the firm’s New Port Richey, Florida office location.
As a background, variable annuities are complex products that combine aspects of investing and insurance. The Securities and Exchange Commission (SEC) has 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.
However, variable annuities are often unsuitable for investors because the benefits of variable annuities are often outweighed by the terms of the contract that include exorbitant expenses such as surrender charges, mortality and expense charges, management fees, market-related risks, and rider costs.
The number of customer complaints against Velten is high relative to his peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.
Investors who have suffered investment losses due broker misconduct may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors concerning securities violations. Our consultations are free of charge and the firm is only compensated if you recover.