Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jeffrey Anderson (Anderson), previously associated with Pruco Securities, LLC., has at least 6 disclosable events. These events include 4 customer complaints, 2 regulatory events, alleging that Anderson recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 27, 2022.
Section 8.E(1)(j) of the Illinois Securities Law of 1953 [815 ILCS 5] (“the Act”) provides, inter alia, that the registration of a salesperson May be denied, suspended or revoked if the Secretary of State finds that the salesperson has had membership or association with any self-regulatory organization registered under the Federal 1934 Act or the Federal 1974 Act suspended, revoked, refused, expelled, cancelled, barred, limited in any capacity, or otherwise adversely affected in a similar manner arising from any fraudulent or deceptive act or a practice in violation of any rule, regulation or standard duly promulgated by the self-regulatory organization
FINRA BrokerCheck shows a final customer complaint on August 02, 2021.
Without admitting or denying the findings, Anderson consented to the sanction and to the entry of findings that he converted and misused $26,579.72 from an elderly customer. The findings stated that this matter originated from the Uniform Termination Notice for Securities Industry Registration (Form U5) amendment filed by Anderson’s member firm disclosing two customer complaints against him. The findings also stated that Anderson convinced the customer to write checks to him personally by telling the customer that the funds would be used to purchase investments or insurance for the customer. Rather than using the funds to purchase investments or insurance, however, Anderson deposited the customer’s funds into his personal bank account and used the funds to pay for personal expenses, including household expenses, food, gas, and car payments. Anderson’s firm paid the customer $26,579.75 to compensate her for the funds taken by him.
FINRA BrokerCheck shows a settled customer complaint on April 08, 2021.
The policyowners allege that their former RR provided them with a statement on September 1, 2020 which he created for one of their policy review meetings indicating an inflated accumulation value for their variable annuity policy as $29,847.56 when the actual balance was $19,102.08. The policyowners further allege when they purchased a fixed annuity policy in April 2015, they were informed the policy would pay an interest rate of 5% but the applicable interest rate was 1.9%. They also claim they were not aware of the liquidity risks of their annuities. The policyowners want the opportunity to be able to surrender their annuities with no penalties and invest their money how it should have originally been invested.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $16,500.00 on September 10, 2020.
The customer provided the Firm with copies of three personal checks from the period October 2019 to November 2019 which were made payable to and endorsed by the RR totaling $16,500. The customer would like to know if the funds given to the RR were for legitimate expenses.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $9,826.00 on September 02, 2020.
The policyowner alleges that on May 3, 2016, the RR recommended that he move funds from a variable annuity to a fixed annuity. The customer stated he withdrew $122,000 from the variable annuity policy and reinvested $113,000 in a fixed annuity on May 14, 2016. The Firm determined the customer incurred $9826 in surrender charges as a result of the transaction.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $25,680.48 on August 18, 2020.
The policyowner advised that the RR misled him and his wife at the time of the sale in February and March 2018 that canceling his life insurance policies with another carrier and purchasing policies with NYL would save him money. The policyowner alleges he recently learned that he is paying more in premiums and that he had no idea the money to pay the premiums was coming from a variable annuity the RR sold him. The policyowner would like the policies the RR sold him canceled, the premiums paid refunded and their old policies reinstated.
When your financial advisor is providing advice they must adhere to the SEC’s Regulation Best Interest (Reg BI) rule and standard of care. Reg BI replaced the former “suitability” rule and created a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
Next, the broker must understand the investor’s investment background and profile. A customer’s profile includes information that describes the investor’s financial situation and needs. Information here will include their outside securities accounts and investments; relevant assets and debts; tax bracket; age; liquidity needs; risk tolerance; investment time horizon; experience with investing; investment objectives; and any other relevant information that the investor may choose to disclose pertinent to their situation. Finally, the financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail investor’s best interest. In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Anderson has been in the securities industry for more than 6 years. Anderson has been registered as a Broker with Pruco Securities, LLC. since 2020.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.