Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, July 23, 2009

FINRA Fines 5 Bank Broker-Dealers for Improper Variable Annuities Sales

FINRA announced today that it fined five bank broker-dealers a total of $1.65 million for deficient supervision and procedures related to variable annuity (VA), mutual fund or unit investment trust (UIT) transactions.  Brokers at each of the firms operated out of branches of affiliated banks, selling VAs, mutual funds or UITs to bank customers, who, in many instances, were elderly. The brokerage customers were referred by bank personnel, and sales of these financial products represented a significant portion of each firm’s business.

 The five firms that FINRA fined for deficient systems and procedures relating to VA, mutual fund or UIT sales, and the amount of their fines, are:

McDonald Investments (now KeyBanc Capital Markets, Inc.) - $425,000
IFMG Securities - $450,000
Wells Fargo Investments, LLC - $275,000
PNC Investments - $250,000
WM Financial Services, Inc. (now Chase Investment Services Corp.) - $250,000

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