Articles Tagged with Signator Investors

shutterstock_138129767-300x199According to BrokerCheck records Brian Murphy (Murphy) has been sanctioned and barred by The Financial Industry Regulatory Authority (FINRA) over allegations that the broker failed to respond to the regulator’s requests for information.  In July 2016, Murphy was terminated by his firm Signator Investors, Inc. (Signator) on allegations that Murphy admitted to conducting an unapproved outside business activity.  In the industry all such activities must be disclosed and approved by the firm before the broker can engage in them.

Murphy has been terminated by three employers in total during his career.  In November 2014 Murphy was terminated by MetLife Securities, Inc. (MetLife) for making a representation that he had a professional designation that he did not in fact possess.  In addition, Murphy has been subject to a number of customer complaints concerning the sale of variable annuities.

At this time it is unclear what outside business activity Murphy was engaged in.  However, the risk to investors is that the broker will use such businesses to engage in unauthorized securities activities.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

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shutterstock_145368937The investment fraud lawyers of Gana LLP are investigating the employment termination filed with The Financial Industry Regulatory Authority (FINRA) by Woodbury Financial Services, Inc. (Woodbury Financial) involving broker David Ross (Ross). According to BrokerCheck records Ross is subject to one customer complaint, one employment separation for cause, and six judgment or liens.

According to Woodbury Financial, the firm terminated Ross after alleging Ross failed to disclose an outside business activity (OBA) and accepted loans form a client in addition to violating other firm policies and procedures.  Often times such filings indicate that the broker is engaging potentially in private securities transactions, promissory notes, or loans away from the firm.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.

At this time it unclear the scope of Ross’ OBAs and/or private securities transactions.  According to brokercheck records Ross has disclosed OBAs listed as including Ross Financial Planning, Inc., Belmont University, and First Shot Foundation.  Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, real estate brokers, or insurance agents to clients of those side practices.

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shutterstock_180341738The investment fraud lawyers of Gana LLP are investigating the regulatory investigation filed by The Financial Industry Regulatory Authority (FINRA) against broker Scott Muirhead (Muirhead). According to BrokerCheck records Muirhead is subject to one bankruptcy filing in 2013 and one criminal matter.  The FINRA regulatory matter concerns the agencies attempt to investigate the circumstances surrounding alleged sales of private securities transactions. (FINRA No. 2015044785301).  When Muirhead refused to cooperate with the investigation, FINRA automatically barred Muirhead from the industry.

According to FINRA, Muirhead consented the entry of findings that he failed to respond to FINRA’s requests for documents during its investigation into allegations that Muirhead engaged in unapproved private securities transactions and misused customer funds.  The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.  At this time it unclear the nature and scope of Muirhead’s outside business activities and private securities transactions.  Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance to clients of those side practices.

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shutterstock_186471755The Financial Industry Regulatory Authority (FINRA) sanctioned broker James Moniz (Moniz) concerning allegations that while registered with Signator Investors, Inc. (Signator) Moniz made unsuitable recommendations to a married couple that they purchase a Variable Universal Life insurance policy (VUL) on the husband’s life and use the proceeds of a reverse mortgage to purchase a variable annuity and open a managed investment account. According to FINRA, after the insurance company questioned the VUL application, Moniz caused the application to be re-submitted with changed or added information without first informing the customers of his actions. FINRA found that Moniz also inaccurately represented the source of funds for the variable annuity and managed account.

VUL are complex dual part insurance and investment products that investors must fully understand the risks and benefits of prior to investing. One feature of a VUL policy is that the owner can allocate a portion of his premium payments to a separate sub-account that can be used to grow in value through investments. The other part of the investment is the life insurance policy where the policies monthly charges including a cost of insurance charge and administrative fees are deducted from the policy’s cash value. The cash value of the policy may increase or decrease based on the performance of the selected investments. However, customers must be careful in purchasing VULs because the policy terminates, or lapses, if at any time the net cash surrender value is insufficient to pay the monthly cost deductions. When the policy terminates the remaining cash value becomes worthless.

Given the costs involved in purchasing VULs, brokers must be careful to ensure that the recommendation to invest in VULs is suitable for the client. While an investor may be able to afford the initial purchase price of the policy it may be too expensive for the client to continue to make premium contributions over time causing the policy to lapse.

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