Massachusetts Regulator orders Investment Professionals Inc. (IPI) to pay a fine and restitution
Investment Professionals Inc., a broker-dealer based in San Antonio, Texas, has been ordered by the Massachusetts Securities Division to pay a $100,000 fine for having allegedly sold unsuitable investment products to senior citizens.
Secretary of the Commonwealth William F. Galvin ordered Investment Professional, Inc., (IPI) a broker-dealer based in San Antonio, Texas, to pay the fine and also to offer restitution to four senior clients. According to the Massachusetts Securities Division, the seniors were sold unsuitable investment products on the premises of local financial institutions. IPI admitted the facts set out in the order.
The Massachusetts Securities Division charged the broker-dealer last November with using high pressure sales contests and selling unsuitable investment products to senior citizens who were depositors at community banks. IPI partnered with the community banks and the bank’s existing depository customers were used to provide revenue to IPI and additional revenue to the bank, the complaint stated. “This case highlights the dangers of aggressive sales culture that leaves older customers exposed to pressure to buy unsuitable investments,” Secretary Galvin said. “This is especially true when the broker dealer is operating out of a community bank.”
IPI will retain an independent compliance consultant to review its policies governing supervision of its financial consultants in the state and its sales of securities to persons over 65. The review also will include IPI’s compliance with Financial Industry Regulatory Authority Inc. rules on networking arrangements, non-cash compensation, and gifts and gratuities.
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