Articles Posted in FINRA News

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Ameriprise Financial Services, Inc. (Ameriprise) submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for alleged supervisory failures in connection with wire transfers from customer brokerage accounts and the resulting conversion of over $370,000 by one of its registered representatives.

Ameriprise is headquartered in Minneapolis, Minnesota and employs nearly 14,000 registered representatives in approximately 3,800 branch offices.  FINRA found that from October 2011 to September 2013, a registered representative, working as an office manager, converted more than $370,000 from five Ameriprise customers.  The customers happened to also be the registered representative’s family members, including his mother, step-father, grandparents and domestic partner.  FINRA’s findings state that the Ameriprise employee’s conversion, which occurred via nine wire transfers, went undetected for two years by Ameriprise.  Continue reading →

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Houston, Texas-based VALIC Financial Advisors, Inc. (VALIC) was hit with a $1.75 million fine by the Financial Industry Regulatory Authority (FINRA) for failing to prevent compensation conflicts.  VALIC is alleged to have incentivized its registered representatives to sell its own annuities and discouraged them from selling non-proprietary products.

FINRA found that from October 2011 to October 2014, VALIC failed to maintain a reasonable supervisory system to address the potential conflicts of interest created by its compensation policy, which incentivized its representatives for recommending that customers move funds from VALIC variable annuities to the firm’s fee-based platform or a VALIC fixed index annuity.  Further, FINRA found that VALIC made the compensation conflict worse by prohibiting its representatives from receiving compensation when moving customer funds from a VALIC variable annuity to a non-VALIC variable annuity, mutual fund or other non-VALIC product. Continue reading →

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H.D. Vest Investment Securities, Inc. dba H.D. Vest Investment Services (H.D. Vest) of Irving, Texas 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 timely and/or accurately report customer complaints, and failing to adequately supervise variable annuity transactions to be sure the products were suitable for customers.

FINRA alleges that during the period September 2012 through July 2015, H.D. Vest failed to accurately and/or timely report seven customer complaints in FINRA’s 4530 Complaint Reporting System.  According to FINRA, H.D. Vest failed to accurately report three customer complaints by failing to select the most egregious problem code; identifying the wrong registered representative in its reporting of another customer complaint; and failing to timely report an initial customer complaint. Continue reading →

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Shearson Financial Services, LLC (SFS) of Boca Raton, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly maintaining inaccurate books and records.

FINRA investigators found between June 10,2013 through October 6,2015, SFS maintained inaccurate books and records reflecting that 1,873 transactions were unsolicited, when in fact, the transactions were solicited, in violation of FINRA Rules 451 1(a), 2010, and Section 17(a) and SEC Rule 17a-3 of the Securities Exchange Act. In addition, during this period, SFS, acting through 15 registered representatives, exercised discretion in 231 transactions in 56 customer accounts, without written authorization from the account holders, in violation of NASD Rule 2510(b) and FINRA Rule 2010.

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