December 2, 2016 Comments (0) Blog, Current Investigations, Securities Fraud

Roger S. Zullo and LPL Financial Annuity Investigation

Roger S. Zullo
(Last Updated On: July 31, 2017)

Investment Losses with Roger S. Zullo

Have you suffered losses as a result of an annuity you purchased thorough LPL Financial and its advisor, Roger S. Zullo?  If so, the securities attorneys of The White Law Group may be able to help you recover your losses.

According to reports, the Massachusetts Securities Division recently charged LPL Financial and broker, Roger S. Zullo, with profiting on sales of unsuitable, illiquid, high-commission variable annuities and violating the firm’s own sales policies.

Roger Zullo, a Boston securities broker, allegedly fabricated client risk profiles in order to sell “scores” of annuities from 2013 through April 2016.  He made $1.8 million in commissions and many of his clients surrendered cost of thousands of dollars, according to the complaint filed by Secretary of the Commonwealth William Galvin. The majority of the commissions allegedly came from sales of Polaris Platinum III B-share variable annuities sponsored by AIG.

Failure to Supervise

LPL allegedly ignored red flags and warnings from Roger Zullo’s supervisors about the formulaic nature of his sales, and rewarded him with a membership in its “Chairman’s Club” for top producers. Zullo allegedly collected 90% of the commissions he produced.

According to FINRA, Zullo has been registered with LPL since 2004 and has been working in the securities industry since 1988. He has no disclosure events listed on his Broker Check profile.

Zullo’s supervisor allegedly reported to his LPL managers concerns about Zullo’s practice of switching his clients out of variable annuities every six to seven years, right before the surrender period had expired and replacing them with a similar product.

LPL recently told brokers that as of January it will restrict upfront commissions they can receive on most variable annuity sales.  Unfortunately for many investors, the harm has already been done.

Massachusetts ordered LPL in 2014 to pay $541,000 in restitution to investors who were not properly informed about surrender charges on variable annuities. LPL also paid Illinois regulators and investors $2.8 million in fines and restitution in 2014 for failing to properly document variable annuity exchanges. 

The Massachusetts complaint seeks to revoke Zullo’s brokerage and investment adviser licenses in Massachusetts, permanently bar him from registration in the state, require him and LPL to disgorge all profits and other remuneration from the alleged wrongdoings and offer to pay all surrender charges associated with current variable annuities sold over the relevant time period to Zullo’s former and current clients.

It also seeks unspecified fines and an order requiring LPL to hire an independent consultant to review and recommend improvements to the firm’s annuity sales review process.

Brokerage firms are required to properly supervise all advisors they employ and to ensure that those advisors are complying with applicable FINRA rules and regulations. If it can be demonstrated that Zullo’s former employer failed to properly supervise him, his employer may be held responsible for the losses in a FINRA arbitration claim.

Free Consultation

If you suffered losses investing with Roger Zullo or LPL and would like a free consultation to discuss your litigation options, please call The White Law Group at 1-888-637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.