The Securities and Exchange Commission (SEC) recently announced that it has censured Gilman Ciocia and its Prime Capital Services unit for misrepresenting the variable annuities sold to senior citizens in South Florida.
In an order, the SEC found that from approximately November 1999 through February 2007, Prime Capital Services, a broker-dealer that Gilman Ciocia acquired in 1999, offered and sold variable annuities that were unsuitable investments for elderly customers due to the customers’ ages, liquidity and investment objectives.
The order also found that Gilman Ciocia aided and abetted the broker-dealer’s fraud by arranging and marketing free-lunch seminars in the South Florida area at which Prime Capital Services registered representatives recruited elderly customers whom they later induced to buy variable annuities. The SEC further found that Prime Capital Services failed to implement the firm’s supervisory procedures in a way that reasonably could be expected to detect and prevent the registered representatives’ violations of federal securities laws.
The SEC issued an order censuring both Prime Capital Services and Gilman Ciocia, and ordered them to cease and desist from violating securities laws. Prime Capital Services was also ordered to disgorge $97,389.05, plus $46,873.53 in prejudgment interest, while Gilman Ciocia was ordered to pay a civil monetary penalty of $450,000 to be paid in three installments.
In addition, Prime Capital Services and Gilman Ciocia have agreed to take several steps, including hiring an independent compliance consultant to review and recommend changes to Prime Capital Services’s supervisory procedures; restricting some representatives from involvement in variable annuity sales until the independent compliance consultant has completed its review; refunding the variable annuity fees incurred by certain elderly customers of particular registered representatives; and giving notice of the settlement to elderly customers who bought variable annuities from particular registered representatives in the past five years.
Prime Capital Services and Gilman Ciocia consented to the issuance of the order without admitting or denying any of the findings.
According to Prime Capital Services’ FINRA Broker Report (CRD), the SEC investigation is not the first time that the firm has been named in a securities related investigation. In fact, it appears that the firm has been named in at least 6 regulatory investigations and 7 customer complaints.
If you have questions regarding investments you made with Prime Capital Services or Gilman Ciocia, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help.
The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. The firm has over 30 years of experience in securities litigation matters and handles matters throughout the country and Florida, including reviewing securities fraud cases in Boca Raton, Delray Beach, Boynton Beach, Lake Worth, Palm Beach, Wellington, Jupiter, Stuart, and Vero Beach. To contact the firm, please call 312-238-9650. Or, for more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.