Banc One fined for deferred VA sales

Banc One Securities Corporation of Chicago was fined $225,000 by the Financial Industry Regulatory Authority for making unsuitable sales of deferred variable annuities to 23 customers, and for having inadequate systems and procedures governing annuity exchanges. FINRA officials said in a statement 21 of the 23 customers affected were over the age of 70. In addition to the fine, FINRA is requiring the firm to allow each of the 23 customers to sell their variable annuities without penalty and pay restitution of about $6,500 to two customers who exchanged annuities. "When firms are recommending annuities or annuity exchanges to elderly customers, they must act in the customers' best interests, taking into account all relevant factors — including the customers' ages and liquidity needs, surrender charges, product expenses and investment features,” said Susan Merrill, FINRA Executive Vice President and Chief of Enforcement, in a statement. “The exchanges at issue in this case appeared to have no real benefits to the customers, while subjecting them to new sales charges and locking up their money for a new, six-year surrender period." “BOSC neither admitted nor denied the charges, but consented to the entry of FINRA’s findings, said FINRA officials in concluding the settlement.