Securities Lawyers Blog
The investment lawyers at Gana Weinstein LLP have experience helping investors determine whether their portfolio losses at investment firms, such as Voya Financial Advisors, Inc., were caused by broker misconduct. There are many different ways that your broker can impermissibly drain your accounts. Our attorneys can help you understand the cause of your investment losses, uncover misconduct, and apply the law to hold accountable those responsible.
Voya Financial Advisors is an insurance-focused broker-dealer and investment adviser that combines brokerage and insurance distribution with financial planning, portfolio management and the selection of other advisers for individual, family and institutional clients. Headquartered at One Orange Way in Windsor, Connecticut and originally formed in Minnesota in 1968, the firm serves a client base made up mainly of individuals and high-net-worth individuals.
Voya Financial Advisors, Inc. – By the Numbers:
- CRD #: 2882
- Regulatory Events: 36
- Arbitration Events: 9
- Broker Employees: 977
Voya Financial Advisors, Inc. – Investment Advisors:
- SEC #: 46585
- Assets Under Management: $3,870,673,693
- ADV Form Employee: 638
Voya Financial Advisors, Inc. – In the News:
FINRA v. Voya Financial Advisors, Inc. (Case #2020065474001) – Between March 2018 and September 2019, Voya paid approximately $2.9 million in transaction-based compensation to an unregistered entity in violation of FINRA Rules 2040 and 2010.
FINRA v. Voya Financial Advisors, Inc. (Case #2016050231901) – Between January 1, 2009, and May 26, 2016 (the “Relevant Period”), Voya disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front end sales charge (“Eligible Customers”). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, Voya failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Voya violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
FINRA v. Voya Financial Advisors, Inc. (Case #2016048792701) – In connection with matter 20160487927, the TRACE Agency/Securitized Products (“SP”) Team of the Department of Market Regulation reviewed the firm’s compliance with Trade Reporting and Compliance Engine (“TRACE”) reporting requirements for TRACE-eligible SP during the period from October 1, 2015, through December 31, 2015 (the “review period”). During the review period, the firm failed to timely report transactions in TRACE-eligible SP, and as a result, the firm violated FINRA Rules 6730(a) and 2010.
FINRA v. Voya Financial Advisors, Inc. (Case #2014039172901) – This case concerns VFA’s failure to establish, maintain, and enforce a supervisory system reasonably designed to identify red flags in the sale of multi-share class variable annuities (“VAs”). Between July 2012 and August 2014 (the “Relevant Period”), VFA earned over $198 million, or approximately 25%, of its revenue from the sale of VAs. Approximately $72 million, or 36%, of VFA’s VA revenue was earned from the sale of L-share VAs (“L-share contracts”). L-share contracts typically provide a shorter surrender period, of three to four years, than B-share contracts, which typically have a surrender period of 7 years. Insurance companies design L-share contracts so that customers pay a higher fee for the benefit of a shorter surrender period. L-share contracts are designed for investors with short-term time horizons or who want the optionality of being able to surrender the L-share contract sooner than a B-share contract. Pursuant to the terms established by the insurance company manufacturers, if a purchaser chooses not to surrender an L-share contract during the surrender period, the purchaser continues to pay a higher annual fee for the life of the contract, unless the contract provides for a “persistency credit.” During the Relevant Period, current VFA customers purchased 1,315 L-share contracts together with one of two Long-Term Income Riders. The first of these riders, frequently known as the Guaranteed Minimum Income Benefit Rider (GMIB), provides for the added benefit of guaranteed income for life. The second, frequently known as the Guaranteed Minimum Withdrawal Benefit Rider (GMWB), provides for the added benefit of guaranteeing a minimum amount the customer will be able to withdraw from the contract over time (the riders are collectively referred to as the “Long-Term Income Riders”). Long-term income riders are designed for investors with long-term time horizons and cost purchasers additional annual fees in exchange for the added benefits. Moreover, because of the potentially incompatible time horizons, L-shares with Long-Term Income Riders may present a red flag that the purchase may not be suitable for a customer’s investment objectives and time horizon. Of the 1,315 L-share contracts with Long-Term Riders VFA sold during the Relevant Period to current customers, approximately 70% of the customers had a long-term investment horizon, which should have been a red flag given the short-term nature of L-shares. VFA, however, had no system to review for VA share classes and no system for identifying potential patterns of unsuitable sales. VFA also failed to provide its registered representatives and principals with adequate training and guidance on suitability considerations for multi-share class VAs.
Our attorneys have successfully represented hundreds of investors in investment disputes with their brokers and brokerage firms. Our consultations are free and we welcome all inquiries.