The Financial Industry Regulatory Authority is accusing Winston Wade Turner, a former registered representative with Pruco Securities Inc. and MetLife Securities Inc., of misconduct related to the exchanges and sales of variable annuities. Turner allegedly persuaded clients to exchange certain investments, including variable annuities, which compelled them to surrender existing contracts to pay for the purchase of new variable annuities. In certain situations, this led to surrender charges for the client and additional commissions for Turner.
The regulator contends that Turner concealed the transactions’ unsuitable nature from brokerage firms and his clients. He allegedly did this by falsifying documents and misrepresenting how certain income features on the annuity contracts functioned. FINRA claims that Turner hid the nature of the VA transactions from his firm by managing to get around the additional documentation and supervisory examination mandated for the exchanges. He also sometimes would recommend clients put proceeds from the contract surrenders into their bank accounts first-as opposed to a direct annuity to annuity transfer-and then use those funds to purchase new variable annuities.
Turner is also accused of falsifying VA applications, documents related to VA exchanges, and customer information forms. He purportedly forged customer signatures and used his own e-mail address, misrepresenting it as customers’ addresses so that he received the account notifications instead of them.
He allegedly falsely represented the purpose of income riders found on certain VA accounts and notified clients that they would make a guaranteed minimum of interest every year even though the contracts only guaranteed annuitization rates or minimum withdrawal.
The FINRA complaint references 12 clients who were impacted. It states that five clients lost about $151K collectively due primarily to charges they sustained from surrendering the variable annuity contracts. The self-regulatory organization is seeking full disgorgement of any ill-gotten-gains plus interest from Turner, who, according to a FINRA BrokerCheck report, also has two outstanding customer disputes from when he worked at Pruco. Damages alleged in those disagreements are $49K and $75,200, respectively.
Turner was registered as a representative with MetLife Securities from ’11-’13. He was registered with Pruco from ’13 to ’15 and let go from there for purportedly making an unsuitable recommendation and giving inaccurate information about the transaction.
Although Turner is not a registered representative anymore and cannot sell securities products, including variable annuities, he still is licensed to sell insurance products, including fixed-indexed annuities and fixed annuities, in Florida.
A variable annuity is a contract between a customer and an insurer. The annuity provides different investment options. There is concern that the high commissions that are generated by variable annuity contracts give representatives incentive to sell these products. The U.S. Department of Labor’s proposed and pending fiduciary rule is expected to change the landscape of the variable annuities industry, including the likely change from a fee-based system rather than a commission-based one.
If you are an investor who sustained losses from variable annuities and you believe that those losses are due to the negligence of others, please contact our securities law firm today. One of our variable annuities fraud lawyers would be happy to assist you.
Former MetLife, Prudential broker accused of deceptive variable annuity sales practices, InvestmentNews, March 1, 2016
Variable Annuities, FINRA