Annuities - Law Offices of Robert Wayne Pearce

Dec 16, 2015

Lincoln Financial Advisors Fined for Supervisory System Failures

Lincoln Financial Advisors Corporation (LFA) of Fort Wayne, Indiana submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to implement and enforce reasonable supervisory procedures related to the recommendation of private placement variable annuities (PPVA). LFA has been a FINRA member since 1969 and has nearly 2,500 registered representatives and over 500 branch offices. FINRA found that between October 2008 and April 2009, representatives from two of LFA’s branch offices recommended customers to invest in a hedge fund that engaged in a complex option trading strategy. FINRA alleged that the complexity of the hedge fund exposed the LFA clients to a high degree of financial risk. LFA however approved the recommendations and 25 firm customers invested approximately $11.7 million in the hedge fund. In 2010, the hedge fund was shut down.

Oct 21, 2015

Park Avenue Securities Broker Suspended for Equity-Indexed Annuity Sales

Robert Michael Diehl, a former broker with Murphysboro, Illinois based Park Avenue Securities LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which the Financial Industry Regulatory Authority (FINRA) found that he sold equity-indexed annuities (EIAs) to his firm’s customers but failed to properly notify the firm of the sales. FINRA found that rather than having the customers complete the appropriate applications and submitting them to his member firm, Robert Diehl submitted the applications directly to the issuer of the EIAs. In doing so, Mr. Diehl bypassed the supervisory review and approval of the sales of the EIAs. FINRA’s findings state that Mr. Diehl neglected to disclose to Park Avenue Securities that he made the sales, for which he received approximately $55,500 in commissions by the EIA issuer without receiving permission for the sales from Park Avenue.

Aug 28, 2015

SAI Representative Suspended and Fined for Outside Business Activities

Glen Woodward of White Bluff, Tennessee, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in outside business activities without his firm’s approval.

May 8, 2015

LPL Financial Hit with $11.7 Million Fine for Failure to Supervise Investment Sales

LPL Financial LLC (LPL Financial) was fined $11.7 million by the Financial Industry Regulatory Authority (FINRA) for failing to maintain a proper supervisory system with respect to the sales of complex investment products, such as exchange-traded funds (ETFs), variable annuities, mutual funds, and non-traded real estate investment trusts. Without admitting or denying the findings, LPL Financial consented to FINRA’s sanctions and findings that if failed to enforce its supervisory procedures for the sales of non-traditional ETFs, such as leveraged, inverse, and inverse-leveraged ETFs. Specifically, FINRA found that LPL Financial failed to enforce allocation limits with respect to customers’ investment objectives in its sales of non-traditional ETFs. LPL also failed to ensure that some of its registered representatives were adequately trained to sell the ETFs.

Mar 27, 2015

Complaint Filed Against Allstate Representative for Fraud

A complaint filed by the Financial Industry Regulatory Agency (FINRA) against Philip Leonard Grasso Jr. alleges that he, a representative of Allstate Financial Services, LLC (Allstate Financial) “inserted himself into the lives of two elderly customers in order to defraud them of their funds.” FINRA alleged that while Mr. Grasso was on a medical leave of absence from Allstate Financial, he inserted himself into the lives of two elderly customers (ages 89 and 91) in order to defraud them financially. Between December 2013 and January 2014, Mr. Grasso allegedly convinced the two elderly clients to liquidate their various life insurance policies and annuities (approximately $227,150) and open a brokerage account. Mr. Grasso allegedly then took all the funds from the brokerage account and put them in his own bank account. Mr. Grasso used these client funds for personal expenses like his mortgage and stock investments. In an attempt to hide the misconduct, Mr. Grasso allegedly created false documents for his clients and misrepresented their investment. Mr. Grasso was terminated by Allstate Financial due to allegations that he “commingled the customers’ funds” in May 2014. As it’s a current investigation, FINRA has requested sanctions and restitution to be imposed upon Mr. Grasso.

Jun 17, 2014

Uncapped Indexed Annuities Are Not the Next Big Thing for Investors

Indexed annuities sales have grown exponentially over the last couple of years as agents and brokers are recommending them as fixed income or guaranteed lifetime withdrawal components of investors’ portfolios. In fact, first quarter sales of indexed annuities hit $10.9 billion, which is up by approximately 39% from the year-ago period, according to investment news sources. Now, as broker-dealers unveil “uncapped indexed annuities,” a product that purports to give conservative clients a way to benefit from surging equity markets without limitations while protecting downside risk, investors are urged to remain wary in order to detect misrepresentations and avoid misunderstandings related to the product.

May 6, 2014

FINRA Focused on Broker-Dealers’ Increased Equity Indexed Annuity Sales

InvestmentNews reports broker-dealers are leading the pack in the world of equity indexed annuities, with sales reaching more than $38 billion in 2013, up over 13% from a little over $34 billion in 2012. Most of that growth is attributable to sales activity at large regional firms. At LPL Financial, the largest independent broker-dealer with 13,600 affiliated reps and advisers, sales of fixed annuities and equity indexed annuities have surged in the first quarter of 2014. Sales of variable annuities at the firm, meanwhile, decreased approximately 2% in the first quarter, down to about $198 million.

Apr 4, 2014

FINRA Fines and Suspends Allen St. Amour for Selling Away Equity Indexed Annuities

Allen Wayne St. Amour, a former Traverse City, Michigan-based registered representative employed by Springfield, Massachusetts-based MML Investors Services, LLC and New York, New York-based NYLIFE Securities LLC, was fined and suspended based on the Financial Industry Regulatory Authority’s (FINRA) findings that he sold equity indexed annuities to his member firm’s customers without giving prior written notice to the firm. Mr. St. Amour allegedly received a total of $114,030 in compensation for the sales. FINRA’s findings also stated that Mr. St. Amour signed a customer’s name on documents related to the purchase of variable annuities in contravention of his firm’s rules and without receiving the customer’s written authorization to sign the customer’s name. Mr. St. Amour allegedly submitted the documents to his firm without informing anyone that he had signed the customer’s name. FINRA’s findings further stated that Mr. St. Amour failed to amend his Form U4 to disclose a fine the Indiana Commissioner of Insurance had imposed.

Mar 20, 2014

Phillip Gainey Fined and Suspended by FINRA for Selling Away Equity-Indexed Annuities

An annuity is a form of insurance that offers a series of payments for a period of time. The traditional annuities are either fixed or variable. Fixed annuities are invested in conservative investments, and the return to investors may vary, but a minimum rate of return is established. Variable annuities are higher in risk when compared to fixed annuities and depend on how the stock market is performing. Variable annuity buyers have the option to allocate the cash invested into different asset classes such as mutual funds, indices, fixed income investments or bonds, and money market.