Securities Headlines: FINRA Wants Ex- Merrill Lynch Adviser to Pay Monetary Sanctions Over Misleading Recommendations, Four Life Insurers Must Pay $3.4M Related to Death Benefits, and JPMorgan Settles with Indiana Over Proprietary Products for $95OK
Ex-Merrill Lynch Adviser Accused of Misleading Clients with IRAs
Landon L. Williams, and ex-Merrill Lynch adviser who is no longer registered with the Financial Industry Regulatory Authority, is accused of misleading five of the firm’s clients by giving them inaccurate information when issuing recommendations for investments. All of the clients had individual retirement accounts. At the time, Williams served as a Merrill Lynch Edge Advisory Center adviser for a year until August 2014.
Merrill Edge customers have less than $250K in accounts. Instead of working with one broker, they work with a team of advisers.
In its complaint, FINRA note a couple of examples, including when Williams allegedly told one customer that the yearly operation cost of a fund was 1.113% when, in fact, it was 1.28%. He purportedly informed one client that she would be able to make up her front-end sales charges in three years even though his notes related to that fund said that she would make them up in seven years.
FINRA is seeking monetary sanctions.
Life Insurance Companies Settle with U.S. States Over Unclaimed Death Benefits
Securian Financial Group Inc., Hartford Financial Services Group, Standard Insurance Co., and Great American Insurance Group have reached a $3.4M settlement with the state insurance departments of North Dakota, Florida, California, Pennsylvania, and New Hampshire. The deal is related to the payment of unclaimed death benefits.
The state regulators were looking into the insurers’ use of the Social Security Administration’s Death Master File database, which helps them determine which insurance policyholders are deceased and what beneficiaries are owed benefits. Over the last several years, state insurance departments have come down on insurers that have not used the information from the database to track down and pay beneficiaries but are utilizing the information for identifying dead annuity contract holders to stop recurring payments to them.
As part of the settlement, the insurance companies will modify business practices and use the master file in a timely and uniform manner to look for dead policyholders and issue beneficiary payments.
Hartford will pay $2.1M of the settlement. Great American will pay $400K, Securian will pay $625K, and The Standard will pay $277K.
JPMorgan to Pay Indiana $950K
JPMorgan Chase & Co. (JPM) will pay $950K to settle claims that the firm did not disclose important information about investment services for clients in Indiana. According to the Indiana Secretary of State’s Office, between ’08 and ’14, JPMorgan failed to tell clients about the model it employed that guided clients toward buying its proprietary products.
Indiana Secretary of State Connie Lawson said the firm’s products were not substantially different from the product belonging to a third party. She noted that investors are entitled to all facts and information while they deciding where to invest their money.
JPMorgan has modified its disclosure practices since then.
At Shepherd Smith Edwards and Kantas, LTD LLP, we help investors recoup losses sustained from securities fraud. Contact our securities law firm today.
Former Merrill Edge adviser accused of misleading customers, InvestmentNews, August 5, 2016
Four life insurers will pay $3.4M to settle probe over death benefits, InvestmentNews, August 5, 2016
Read the Disciplinary Document Against Landon Williams (PDF)
JPMorgan Settlement with Indiana Draws Interest of Other States, Bloomberg, August 3, 2016