FINRA Sanctions NYLife Securities over “Higher-Risk” Mutual Funds
According to the public records on FINRA’s website, on November 20, 2019, the regulator reportedly sanctioned NYLife Securities (CRD #5167) with a censure and a $250,000 fine.
The Financial Industry Regulatory Authority’s sanctions are in connection to NYLife’s alleged “failure to supervise sales of higher-risk mutual funds.” The firm also will reportedly have to pay restitution of more than $76,600 to the 28 customers affected, as well as offer rescission to the customers, who reportedly suffered unrealized losses of about $250,000.
According to FINRA, from September 2014 to December 2016, NYLife Securities allegedly failed to enforce its written procedures for supervising the suitability of sales of higher-risk mutual funds that were purportedly subject to significant volatility.
When customer portfolios were over-concentrated in the higher risk securities, NYLife Securities reps were supposed to help their customers to reallocate the portfolios or determine how to change their risk tolerances and investment objectives to correspond with their assumption of additional risk.
Instead, the representatives reportedly adjusted customers’ risk tolerances and investment objectives to accommodate sales of the funds without first seeking the customers’ input, according to the Letter of Acceptance, Waiver and Consent.
FINRA stated in the AWC that this alleged overconcentration of higher-risk mutual funds in customers’ portfolios reportedly led to losses totaling $1.4 million. Apparently, NYLife had already responded to 21 customer complaints and reportedly paid prior restitution to the tune of $1.1 million.
For FINRA’s full findings see FINRA Case # 2016050685102.
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This information is publicly available on FINRA’s website and provided to you by The White Law Group. If you are concerned about investments you made with NYLife the securities attorneys at The White Law Group may be able to help.
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