A firm settled FINRA charges for selling variable annuities without properly implementing the firm's written supervisory procedures on recommendations and sales.
In a Letter of Acceptance, Waiver and Consent, FINRA found that the firm failed to enforce and update its procedures requiring customers to:
- review the expense ratios of different variable annuities; and
- complete a Variable Annuity Disclosure Form prior to investment.
The firm also failed to record the investment objective and risk tolerance for several customers who purchased variable annuities.
As a result, the firm violated FINRA Rules 2330 ("Members' Responsibilities Regarding Deferred Variable Annuities"), 3110(b) ("Supervision; Written Procedures") and 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle the charges, the firm agreed to (i) a censure and (ii) a $15,000 fine.
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