The Financial Industry Regulatory Authority announced Thursday that it fined five bank broker/dealers $1.65 million for deficient supervision of the sale of mutual funds, variable annuities and unit investment trusts. In most of the cases, the sales were to elderly customers.
“Today’s actions underscore the need for firms operating bank branches to have effective systems and procedures in place to monitor sales of variable annuities, mutual funds and UITs,” said Susan Merill, executive vice president and chief of enforcement at FINRA. “Proper care must be taken to appropriately supervise sales to those customers, particularly the elderly, who can be unfamiliar with securities products as they seek alternatives to certificates of deposit and other bank offerings.”
The five firms fined and the amount they are paying are: McDonald Investments ($425,000), IFMG Securities ($450,000), Wells Fargo Investments ($275,000), PNC Investments ($250,000) and WM Financial Services ($250,000).
In settling the charges, none of the firms admitted or denied the charges, but consented to FINRA’s findings.