Dion Rey Padilla, of San Antonio, Texas, submitted an Offer of Settlement to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly making an unauthorized purchase of a variable annuity for a customer and misrepresenting to the customer on numerous occasions that it was not a variable annuity.
FINRA found that, while employed by NEXT Financial Group, Inc., Dion Padilla misrepresented a variable annuity investment to his customers, who stressed to him that they did not want any of their funds invested in a variable annuity due to the fees and their desire for liquidity. Mr. Padilla allegedly presented a variable annuity application to the customer, assuring him that it was not for a variable annuity, but a type of managed money investment. Mr. Padilla’s misrepresentations, however, were false and misleading.
According to FINRA, relying upon Mr. Padilla’s alleged misrepresentations, his customer invested another $558,889 in the variable annuity, earning Mr. Padilla a net commission of approximately $42,000. When his client inquired about the investment, noting a letter he received thanking him for his recent purchase of an annuity product, Mr. Padilla again allegedly misrepresented that the investment was not a variable annuity, even sending an email to the customer stating that the investment was not a variable annuity. FINRA states, Mr. Padilla affirmed in his email “First and foremost, we will not and have not invested your funds into a variable annuity product.” When the customer finally decided to surrender the misrepresented annuity, he suffered surrender charges in excess of $60,000.
Without admitting or denying the findings, Dion Padilla agreed to the FINRA sanctions and was fined $10,000 and suspended for 15 months from association with any FINRA member in any capacity. The suspension is in effect from March 6, 2017 through June 5, 2018.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers like NEXT Financial to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm’s own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like NEXT Financial, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your NEXT Financial Group investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against NEXT Financial Group stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.