The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Sandeep Varma (Varma). According to BrokerCheck records, Varma has been subject to two regulatory matters in which FINRA sanctioned Varma for various violations of the securities laws. In addition, Varma has been subject to five customer complaints. The majority of these complaints involve the recommendation of unsuitable and misrepresented variable investments including CRTs and life insurance policies.
In January 2018, FINRA found that Varma misrepresented a real-estate planning strategy involving Charitable Remainder Trusts (CRTs) to 70 potential customers by providing misleading claims about the nature of deferred capital gains taxes, risks, and rewards that are involved in CRTs. In addition, Varma recommended that the sale of appreciated assets should be invested into variable annuities and into premiums for an insurance policy. While recommending these investments, Varma failed to disclose that the premium payments for the life insurance policy were dependent on performance of investments in the CRT and that this yielded risk for lapse in the insurance policy. FINRA found that Varma’s positive projection of the performance of investments in the CRT and life insurance policy was exaggerated in a promissory manner because it didn’t disclose the reasonable possibility of negative investment performance. In February 2018, Varma was suspended for 10 days and fined $15,000. Without admitting or denying the findings, Varma consented to the sanctions and to the entry of findings.
Varma has also been subject to numerous customer complaints over the course of his career. The most recent case was filed in August 2017 and alleged that in 2000, Varma recommended an unsuitable life insurance policy investment to customers. The claim was settled at $350,000.