Finra obtains $2.7 million in restitution related to 529 share-class initiative
Morgan Stanley’s $1.7 million settlement highlights remedies for excessive fees
December 30, 2020 3 MINS
Finra announced Wednesday it will return $2.7 million to harmed investors in the initial results of a program targeting brokerages that earned excessive fees for 529 college savings plans.
Most of the restitution the Financial Industry Regulatory Authority Inc. obtained came from a $1.7 settlement with Morgan Stanley Smith Barney. In another settlement, B. Riley Wealth Management agreed to return approximately $250,000 to investors. The remainder of the restitution came from 17 firms that resolved their violations through cautionary action letters.
The settlements stem from the 529 Plan Share Class Initiative Finra launched in January 2019. Under the program, brokerages voluntarily review their supervisory procedures for sales of 529 plans and self-report instances of sel
Finra smacks small B-D with $1.55 million penalty for churning
Worden Capital Management displayed lax oversight of brokers trades, according to Finra
December 31, 2020
The Financial Industry Regulatory Authority Inc. closed out 2020 by sanctioning a small broker-dealer on Long Island more than $1.5 million as part of a settlement over the firm’s brokers’ excessive trades, commonly referred to as churning in the securities industry.
The firm, Worden Capital Management of Garden City, N.Y., will pay clients about $1.2 million in restitution, as well as a $350,000 fine for supervisory and other violations, according to Finra.
Worden Capital Management has 49 registered reps working mostly from six branches in the New York metropolitan area, according to Finra. As part of the settlement, the firm neither admitted to or denied Finra’s findings. Worden Capital Management, led by owner and CEO Jamie Worden, also agreed to hire a consultant to review the firm’s procedures.
The agency will ‘conduct enhanced transaction testing’ to see if firms are acting in customers’ best interests
December 21, 2020 3 MINS
The Securities and Exchange Commission warned brokerages Monday to expect tougher examinations for compliance with the new broker investment advice standard.
When Regulation Best Interest went into force on June 30, in the middle of disruptions caused by the coronavirus pandemic, the SEC said it was looking for ‘good-faith’ efforts to implement the measure. It gave a progress report on compliance based on early examinations at an October roundtable.
In a statement released Monday by the SEC Division of Examinations, the agency indicated that it will broaden and deepen examinations.
The conflicts of interest ranged from 12b-1 fees to cash sweep accounts to alternative investments
December 22, 2020 3 MINS
For almost six years, Voya Financial Advisors Inc. violated its fiduciary duty to advisory clients and was riddled with conflict of interest resulting in a fine and restitution to customers totaling $22.9 million, according to the SEC.
The conflicts at the registered investment adviser arm of the broker-dealer ranged from mutual funds to cash sweep accounts to alternative investments, according to documents filed by the Securities and Exchange Commission.
Like most independent broker-dealers, Voya Financial Advisors operates both a brokerage, that charges commissions, and an RIA, which charges fees. The settlement with the SEC stems from violations at Voya’s RIA, which has close to $16 billion in customer assets.
Finra hits Transamerica with $8.8 million sanction
The settlement includes $4.4 million in restitutions to harmed customers over the sales of unsuitable VA, mutual fund and 529 products
December 21, 2020 2 MINS
Transamerica Financial Advisors agreed to pay $8.8 million in sanctions for unsuitable sales of variable annuities, mutual funds and 529 college savings, Finra announced Monday.
Transamerica’s settlement with the Financial Industry Regulatory Authority Inc. includes a $4.4 million fine and $4.4 million in restitution to approximately 2,400 customers. The broker-dealer self-regulator charged Transamerica with failing to adequately supervise its registered representatives in making recommendations involving the three products for various time periods from 2009 through 2016.
From May 2010 to May 2016, the firm sold approximately 51,000 variable annuity policies, generating $591 million in commissions or more than 40% of Transamerica’s revenue.