The securities and investment fraud attorneys at Gana LLP are investigating the regulatory complaint filed by The Financial Industry Regulatory Authority (FINRA) against broker Stanley Clayton Niekras (Niekras). The FINRA regulatory action alleges that Niekras recommended unsuitable variable annuity exchanges in three customers’ accounts. FINRA found that Niekras effected the annuity exchanges to benefit himself at the customers’ expense. Niekras allegedly misrepresented himself to a couple in their 90s claiming $70,000 of fees due for financial planning services. According to BrokerCheck records, Niekras has been subject to eight customer complaints and one regulatory action among other claims.
The FINRA complaint alleges that Niekras made fraudulent misrepresentations to an elderly couple in their 90s to collect more than $70,000 in estate and financial planning fees while associated with the brokerage firm MML Investors Services, LLC. FINRA alleges that Niekras didn’t have an investment advisory or financial planning agreement with the elderly couple, but he billed them for hundreds of hours of time that he supposedly spent working on their “financial future”, work that he claimed to have done over four years knowing he wasn’t entitled to the “estate planning” or “financial planning” fees he charged. In February 2013, he recommended that the children buy a particular variable annuity with the gifted assets, anticipating collecting about $75,000 in commissions from the sales. The claim is currently pending.
The most recent complaint was filed in December 2010 alleging unsuitable variable annuity recommendations in clients account from January 1995 through March 2005 causing over $5,000 in damages. The claim settled for $247,500.00.
Niekras entered the securities industry in 1993 and is currently not registered with any securities firm. Niekras has been associated with the following firms throughout his career:
• PaineWebber Incorporated (November 1993 – January 1995)
• Morgan Stanley DW Inc. (January 1995 – April 2005)
• MML Investors Services, LLC. (May 2005 – January 2014)
• Purshe Kaplan Sterling Investments (May 2014 – October 2015)
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.
Brokers have a responsibility to treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
The attorneys at Gana LLP regularly speak to investment and securities fraud attorneys about the risks of variable annuities and how to try cases related to variable annuities. The investment fraud attorneys at Gana LLP represent investors who have suffered securities losses due to the mishandling of their accounts. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.