The answer is YES. According to a recent InvestmentNews article, the Financial Industry Regulatory Authority (FINRA) hit AllState Financial with a $1 million fine. FINRA cited a breakdown with the firm’s failures to supervise client and adviser information. According to the statement, AllState failed to supervise certain communications and transactions, as well as retain records and provide clients with required information, due to five systemic problems. Some of the problems had been ongoing for 15 years. They included not reviewing emails to improperly paying trail commissions to brokers no longer registered with the firm. AllState also “did not adequately supervise the use of several programs used by its registered persons to create consolidated reports, which are documents that typically combine information about most or all of a customer’s financial assets, regardless of where they are held.” The firm’s records for 9,000 clients were incomplete and not linked to the firm’s software for sending certain notices and “as a result, AllState did not verify the identity of certain of those accounts; owners, determine whether recommendations were suitable for those customers, and send required periodic account records and notices explaining the firm’s privacy policies to customers.” It also paid $587,000 of trailing commissions to 4,400 brokers who were no longer registered with the firm, as well as incorrectly labeling 2,900 client accounts as closed. If you wish to sue AllState, please call our Chicago and Barrington, Illinois-based law firm.
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