Finra institutes disciplinary proceedings against broker over alleged improper variable annuity sales

Regulator claims Frederick David Holloway replaced lower-cost variable annuities with higher-cost ones without ensuring they were suitable or in their clients' best interests

Apr 3, 2018 @ 2:47 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has instituted disciplinary proceedings against Frederick David Holloway, the owner of Holloway & Associates Inc., to disgorge alleged ill-gotten gains from recommendations he made to clients to exchange their variable annuities.

Finra alleges that Mr. Holloway, whose firm is based in Easton, Md., recommended that customers exchange one deferred variable annuity contract for another without having a reasonable basis for his recommendations.

In the three-and-a-half years between January 2013 and June 2016, Finra said that Mr. Holloway persuaded clients to make 43 transactions in which they exchanged lower-cost VAs for high-cost VAs "without making adequate efforts to ensure that the proposed exchanges were suitable for, and in the best interests of, his customers." Mr. Holloway, who was the sole registered rep in his office, derived 70% of his income from VA sales, according to Finra.

The regulator also charged that between January 2010 and September 2016, Mr. Holloway falsified or inappropriately altered VA transaction paperwork. It said that he had clients sign uncompleted paperwork, which he and his assistant filled in later and/or photocopied for use in other transactions. Finra also charged him with forging or directing his assistant to forge client initials to make changes to paperwork.

Beginning in 2011, Finra also said that Mr. Holloway directed his assistant to impersonate clients and employees of an insurance company in telephone conversations regarding VA transactions.


What do you think?

View comments

Recommended for you

Featured video


InvestmentNews celebrates diversity & inclusion in the financial advice business

Highlights of the Excellence in D&I Awards, showcasing the achievements of 26 individuals and firms that are moving the needle when it comes to diversity and inclusion.

Latest news & opinion

Invesco to buy OppenheimerFunds

Deal brings Invesco another $246 billion in assets, as well as high-fee actively managed funds.

Dawn Bennett found guilty of $20 million Ponzi scheme

Jury took less than five hours to convict the former financial adviser and radio host.

10 advisory firm employee benefits you won't believe

Some advisory firms stand out for their creative efforts to keep their troops happy and engaged. Spa retreat, anyone?

401(k) record keepers seek new revenue streams to 'save themselves'

Service providers are getting pinched by fee compression.

Small-cap funds take a beating

For most of the year, the sector had outperformed, but that all changed last week.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print