James Anderson, an ex-Ameritas Investment Corp. adviser, is now barred by the Financial Industry Regulatory Authority (FINRA) after he failed to participate in a probe into allegations that he had taken part in selling away. Ameritas fired Anderson earlier this year after the brokerage firm’s own investigation found that he had engaged in selling promissory notes and indexed annuities that it had not approved.
Anderson was at Ameritas for 14 years. In April, a claimant filed a FINRA arbitration case accusing of making unsuitable recommendations by pushing promissory notes. The allegations are related to the selling away charges against him. The claimant is asking for $400K in damages.
Selling away typically involves a broker trying to get a client to buy securities that his/or her firm is not holding or offering. This means that the broker-dealer has not approved these products for sale nor have these securities gone through due diligence examinations by the firm to make sure they are products that should be sold to its clients. Selling away is considered a violation of US securities rules.
One reason that a broker may engage in selling away is to make a commission from the product sale. For the customer, purchasing a security that hasn’t undergone proper scrutiny can be risky and may lead to exposures that can result in investment losses that could otherwise have been avoided.
This is not the first time that Anderson has come under scrutiny for selling an unapproved investment product. In 2013, FINRA brought another regulator claim against him and found that he sold Indexed Annuities that were not on Ameritas’ list of approved securities. The self-regulatory authority (SRO) considered this to be an unauthorized business activity.
Johnson is not the only former Ameritas broker to recently be barred. Kristian Gaudet was permanently barred from the industry earlier this year. FINRA announced the bar just weeks after the brokerage firm fired Gaudet following claims from clients that he was using their money to pay for his own spending. He was barred after he refused to show up before the SRO to address the allegations against him.
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) has been investigating broker misconduct claims brought by former clients of Gaudet and now Johnson. Our Ameritas broker fraud lawyers are available to work with clients throughout the US.
Contact SSEK Law Firm and we’d be happy to provide you with a free, no obligation case consultation.
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