Ameritas Investment Corp. Must Pay $180K for Inadequate Supervision Involving VA Sales
The Financial Industry Regulatory Authority is ordering Ameritas to pay $180K for an inadequate supervisory system that oversaw its multi-share class variable annuity sales. The self-regulatory organization claims that between 9/2013 and 7/2015, the brokerage firm failed in its supervision of the VA sales and did not have adequate written supervisory procedures in place.
It was during this period that the firm sold almost 4,100 variable annuity contracts, making more than $58M in the process. 697 of the sales were L-share contracts, rendering approximately $11M. These types of contracts usually come with a shorter surrender period than the more common B-share contracts. FINRA believes that the broker-dealer failed to provide its registered representatives proper guidance on the different share classes that were for sale or on how to discern which ones would be best for each customer.
Fired Broker Will be Paid $3M by UBS
A FINRA arbitration panel is ordering UBS Financial Services (UBS) to pay $3M in compensatory damages to a broker that it fired. The Claimant, James L. Springer, had made numerous claims, including wrongful termination, emotional distress, negligence, unfair competition, breach of fiduciary duty, unpaid wages, and others.
Springer oversaw $350M in client assets while at UBS. He is accusing the brokerage firm of defaming him in order to keep his clients after he decided to leave the firm for Merrill Lynch. However, two days before Springer gave his notice, the firm fired him and allegedly made false statements to his clients, including that he did not act in their best interests and had overcharged them.
After he was fired, Merrill Lynch withdrew its employment offer and 18 client disputes naming him were submitted on BrokerCheck.
The FINRA arbitration panel ruled that UBS was liable in Springer’s case. Although it denied his request for punitive damages and payment of legal fees, the panel ordered the firm to pay its former broker $3M award for defamation. That’s the largest award ever issued for such a claim.
Clients of Rogue Brokers Awarded Over $3M
A FINRA arbitrator has awarded more than $5M to 13 investors who were represented by Georgia broker Jason Charles Parker. He previously worked with LPL Financial (LPLA) and Edward Jones.
According to the investors, their retirement funds and life savings were “decimated” because of Parker, whom they claim forged their signatures, falsified records, and made unauthorized trades. Representing himself, Parker argued that the investors’ case was not submitted in a timely enough fashion and therefore should be tossed. The arbitrator, Brock B. Gordon, Sr., disagreed.
Gordon accused Parker of exceeding “mere negligence” and purposely violating Georgia laws. He also accused Parker of purposely destroying the savings of his clients and showing no remorse for the harm that they suffered.
FINRA had previously barred Gordon. From ’07- 11, there were 10 regulatory disclosures, including customer disputes, in which he was named. Settlements were reached in some of the customer disputes.
Finra fines Ameritas $180,000 over VA sales, Investments News, November 9, 2017
UBS Ordered to Pay Florida Broker $3 Million for Defamation, Advisor Hub, October 27, 2017
Finra awards 13 clients $5 million against rogue broker, InvestmentNews, October 26, 2017
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After Hurricane Maria, Mutual Fund Company Franklin Resources Sells Hundreds of Millions of Dollars of Puerto Rico Bonds, Stockbroker Fraud Blog, October 27, 2017
Two Ex-Ameriprise Financial Services Brokers Settle With FINRA Over Margin Trades, Stockbroker Fraud Blog, October 24, 2017
Credit Suisse and MBIA Insurance Continue to Fight Over Mortgage-Backed Securities Fraud Claims in Court, Institutional Investor Securities Blog, November 2, 2017