The Financial Industry Regulatory Authority Inc. has barred Frederick Holloway, who ran an eponymous firm in Easton, Md., for improperly withholding documents and providing altered documents to Finra in the course of an investigation into his sales of variable annuities.
The investigation also revealed that while conducting his business, Mr. Holloway engaged in other dishonest conduct, including impersonating customers and others on the telephone, completing blank, pre-signed annuity exchange applications and related documents for customers, and cheating on continuing education courses, Finra said in an amended hearing panel decision.
Finra said that Mr. Holloway held Series 1, 24 and 26 licenses, as well as a Maryland state license to sell insurance. He was also a registered investment adviser representative through his firm F. David Holloway, a registered investment adviser in Maryland from March 1991 through 2016, although he had no fee-based advisory clients after 2006.
During the period covered by the investigation — January 2013 through June 2016 — Mr. Holloway earned roughly 70% of his income from variable annuity sales commissions, Finra said.
Finra said that Mr. Holloway recommended to 39 clients that they engage in 42 separate switch transactions during that period, as a result of which Mr. Holloway earned $214,989 in commissions, while his clients paid a total of $114,470 in surrender fees. He also recommended that several customers exchange their annuity for a more expensive product with additional riders, features and subaccounts.