Cadaret Grant, one of the nation’s largest independent broker-dealers, was recently fined by FINRA and ordered to pay a $200,000 fine, as well as further restitution to investors, for the improper sale of variable annuities to elderly clients.
According to the announcement from FINRA, from 2006 to 2008, one of Cadaret Grant’s registered reps sold 13 elderly clients — all age 77 or older — unsuitable death benefit riders to variable annuities. The death benefit was apparently only good through age 80, costing the clients an additional 25 basis points in fees for the life of the policy, even though it no longer applied beyond age 81.
Apparently, in four of the cases, the clients could not benefit in any way from the rider.
FINRA also found that the firm failed to heed red flags regarding the rep, which included several customer complaints on her Uniform Application for Securities Industry Registration, some of which related to annuity sales.
As part of the FINRA action, Cadaret Grant agreed to rescind the purchase of the policies in the case and to offer rebates of the original purchase price of the policies, plus interest and charges, to each of the customers still living.
The firm also agreed to a comprehensive review of its procedures and policies concerning the suitability of variable annuities.
If you have questions about this FINRA announcement or your variable annuity purchases through Cadaret Grant, please call the securities attorneys of The White Law Group at 312/238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.