Category Archives: Variable Annuities

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METLIFE VARIABLE ANNUITY ALERT — Securities Arbitration Law Firm of Klayman & Toskes, P.A. Announces Investigation of MetLife Securities Misconduct in Light of $25 Million in Fines and Restitution Imposed By FINRA

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New York, New York (Globe Newswire) — August 12, 2016 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, announces investigation of MetLife Securities Inc. (“MetLife”)  misconduct in light of $20 million in fines and $5 million in restitution imposed by the Financial Industry Regulatory Authority (FINRA), for violations related to variable annuity replacement transactions. According to the Acceptance, Waiver and Consent, (FINRA No. 2014040870001), the fines and restitutions were due to FINRA’s findings that MetLife had made “negligent material misrepresentations and omissions on variable annuity (“VA”) replacement applications for tens of thousands of customers.”

FINRA commented that these misrepresentations “made the replacement [variable annuity] appear more beneficial to the customer, even though the recommended VAs were typically more expensive than customers’ existing VAs.”   In addition, FINRA reported that during the time period of 2009-2014, MetLife made material misrepresentations and omissions in 72% of the 35,500 replacement applications the firm approved for variable annuities, examples of which included but were not limited to:

  • “MetLife informed customers that their existing variable annuity was more expensive than the recommended replacement, when in fact, the current one was less expensive;
  • MetLife failed to disclose to customers that the proposed replacement would reduce or eliminate important features in their existing variable annuity, such as accrued death benefits, guaranteed income benefits, and a guaranteed fixed interest account rider; and
  • MetLife understated the value of customers’ existing death benefits in disclosures mandated by Reg. 60.”

According to securities attorney Lawrence L. Klayman, “Our investigation is focused on the MetLife sales practices that resulted in the replacement of existing variable annuities which led to a significant loss of benefits due to the reliance upon misrepresentations, conflicts of interest and a failure to supervise.”  K&T’s investigation is related to investments in MetLife variable annuities, including:

  • MetLife Access VA;
  • MetLife Access Select VA;
  • MetLife Accumulation VA;
  • MetLife Asset Builder VA;
  • MetLife Flexible Premium Deferred VA;
  • MetLife Investors VA;
  • MetLife Investors Custom Select VA; and
  • MetLife Investors COVA VA.

Current and former customers of MetLife who have information relating to the manner in which MetLife represented these financial products are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

About Klayman & Toskes, P.A.

K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.

Destination:

Contacts

Klayman & Toskes, P.A.

Lawrence L. Klayman, Esq.

Raymond Gentile, Esq.

(888)-997-9956

www.nasd-law.com

 

LPL Financial LLC Ordered To Pay Restitution To Investors and Fines To FINRA for Failure To Supervise Sale of Non-Traded REITs, Variable Annuities and Exchange Traded Funds

By | Blog, Featured Investigations, FINRA Sales Practice Violations, Non-Traded REITs, Securities Arbitration, Variable Annuities | No Comments

Financial Industry Regulatory Authority (FINRA) sanctioned LPL Financial, LLC with fines of $10 million for, “broad supervisory failures in a number of key areas, including the sales of non-traditional exchange-traded funds (ETFs), certain variable annuity contracts, non-traded real estate investment trusts (REITs) and other complex products”.  Additionally, FINRA ordered that $1.7 million in restitution be paid to investors by LPL Financial to certain customers who purchased non-traditional ETFs.

 

FINRA Examination Findings
According to FINRA regulators, “LPL’s supervisory breakdowns resulted from a sustained failure to devote sufficient resources to compliance programs integral to numerous aspects of its business.” This lack of resources resulted in transactions in complex investment products including non-traded REITs, variable annuities and exchange traded funds that were not properly supervised. The FINRA examination of LPL Financial supervisory procedures found the following:

 

Non-traditional ETFs: LPL Financial “did not have a system to monitor the length of time that customers held these securities in their accounts, concentration limits of those products in customer acclonts, and failed to ensure that all of its registered representatives were adequately trained on the risks of the products.”

 

Variable Annuities: LPL Financial “failed to supervise its sales of variable annuities, in some instances permitting sales without disclosing surrender fees, and in connection with certain mutual fund “switch” transactions, it used an automated surveillance system that excluded these trades from supervisory review.”

 

Non-traded REITs: LPL Financial “Failed to Supervise non-traded REITs by, among other things, failing to identify accounts eligible for volume sales charge discounts.”

 

FINRA examinations are intended to uncover failures to comply with rules and regulations designed to protect investors. According to the FINRA news release, LPL Financial “failed to report certain trades to FINRA and failed to ensure it provided complete and accurate information to FINRA and to federal and state regulators concerning certain variable annuity transactions.” FINRA found, “LPL failed to reasonably supervise its advertising and other communications, including its registered representatives’ use of consolidated reports. LPL did not monitor the creation or use of consolidated reports, and failed to ensure that these reports reflected complete and accurate information.” These findings assert that LPL Financial, in its communications with both regulators and investors, have not complied with securities industry sales practice rules and regulations.

 

Klayman & Toskes, P.A. is a securities litigation law firm dedicated to the protection of investor rights. We can help investors recover investments losses in non-traded REITs, variable annuities and exchange traded funds that are the result of LPL Financial violations of FINRA sales practice rules and regulations.

Do you have a question or need more information? Get in touch with us