FINRA Sanctions O. N. Equity for Rep’s alleged Unsuitable VA Sales
According to public records posted on FINRA’s site this week, the Financial Industry Regulatory Authority has censured and fined O. N. Equity Sales Company $275,000 and ordered the firm to pay more than $1 million in restitution to customers.
From March 2014 through September 2017, the firm reportedly failed to establish and maintain a supervisory system and procedures in connection with the sale of variable annuities, according to FINRA’s findings. As a result, O.N. Equity allegedly failed to detect that its representative recommended an unsuitable investment strategy. The purported strategy involved the liquidation of retirement funds to purchase variable annuities followed by the short-term withdrawal of funds from those annuities to purchase whole life insurance policies, according to FINRA.
This matter originated from customer complaints to FINRA and the firm regarding a former ON Equity registered representative.
The firm’s sanctions reportedly include a censure, a fine of $275,000 and restitution to the customers in the total amount of $1,001,141.86, which includes interest.
Variable annuities are complex investments that are commonly marketed and sold to retirees or individuals saving for retirement. FINRA rules require that firms provide more comprehensive and targeted protection to investors who purchase or exchange variable annuities.
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
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The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through O. N. Equity Sales Company and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
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