The Financial Industry Regulatory Authority (FINRA), recently fined Parsippany, New Jersey-based Summit Equities, $325,000 for failing to supervise broker sales of multi-share class variable annuities to clients. Per an InvestmentNews article, FINRA stated in its settlement with the firm, that from October 2011 to December 2015, Summit Equities failed to reasonably supervise advisers’ recommendations of the variable annuities; the firm also failed to provide training to its registered representatives and principals on the sale and supervision of multi-share class variable annuities. The company also failed to reasonably supervise the private securities transactions of one undisclosed registered representative from 2001 until 2012. Allegedly, during this time, Summit Equities sold 1,037 individual variable annuity contracts to its customers, with 45% of those being L-share contracts.
L-share contracts have a shorter surrender period but with higher administrative costs. These are typically designed for investors who want to withdraw funds from the account after a short period of time. Sales of L-share variable annuities are on the decline, and insurance companies are selling them less and less as the demand for them continues to decline. L-share variable annuities and variable annuities in general may not be suitable for all investors because they can be high-risk and illiquid. If you were sold variable annuity contracts by a Summit Equities broker, you may be able to bring a claim against the firm in order to recover your money losses. Please call 312-332-4200 today to find out how. We are Chicago-based securities attorneys who work on a contingency fee basis only.
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