Infinex Investments Inc. Sanctioned for improperly Selling REITs & VAs to Seniors
According to reports, Secretary of the Commonwealth William Galvin, of the Massachusetts Securities Division, has fined broker-dealer Infinex Investments Inc. for failing to supervise agents who were selling non-traded real estate investment trusts and variable annuities primarily to senior investors at local banks.
According to the order, four senior citizens filed complaints regarding the sales of commission-based securities products which the regulators deemed unsuitable for their investment objectives and circumstances. Additionally, Infinex allegedly failed to disclose that the investors were dealing with a broker-dealer and that the products were not FDIC-insured.
The complaint alleges that in one case, a 54-year old supermarket clerk with $75,000 in savings and limited investment experience, invested $10,000 in a non-traded REIT and $54,000 in a fixed annuity with a 7-year surrender period. Then the Infinex advisor allegedly misrepresented that the investor had $750,000 in savings. The representative reportedly received $3,600 in commissions for the transactions.
Infinex will be required to pay a fine of $125,000 and to make full restitution to the investors, according to the complaint.
In addition, the consent order requires Infinex to cease and desist from further violations of Massachusetts securities laws, imposes a censure, and requires Infinex to retain an independent compliance consultant to review its supervisory structure, supervision of representatives on bank premises, email monitoring and review, use of d/b/a’s similar to the retail bank names, and REIT and annuity sales practices, training and recommendations.
Infinex offers securities on bank premises and has selling agreements with approximately 30 banks in Massachusetts.
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