The Financial Industry Regulatory Authority Inc. on Tuesday said it had fined Triad Advisors, one of the Advisor Group network broker-dealers, $150,000 for failing to adequately supervise short term trades of mutual fund A shares and variable annuity exchanges, known as switches in the industry.
Triad also agreed to pay back clients close to $44,000 to investors as part of its settlement, which covers its shortcoming in supervision from 2015 to 2017. Short-term mutual fund trades and variable annuity switching is generally regarded in the retail securities industry as a way for brokers and advisers to increase commissions at the expense of clients.
As part of the settlement, Triad Advisors neither admitted nor denied Finra's findings. “We do not publicly discuss regulatory matters,” a spokesperson for Advisor Group wrote in an email.
At the time covered by the Finra settlement, Triad was owned by Ladenburg Thalmann Financial Services Inc., which was acquired by Advisor Group last year.
Broker-dealers' poor supervision of variable annuity exchanges is a perennial issue for the retail securities industry. Finra penalized MetLife Securities Inc. in 2016 a stunning $25 million for massive compliance failures when switching clients from one variable annuity to another.
“From June 2015 through July 2017, Triad failed to establish and maintain a reasonable supervisory system to achieve compliance with suitability requirements regarding switching and short-term trading of class A share mutual funds and failed to supervise such trading,” according to Finra.
“Additionally, from June 2015 through December 2017, Triad failed to establish, maintain, and enforce a reasonable supervisory system and written supervisory procedures that were reasonably designed to identify possible inappropriate rates of VA exchanges,” Finra noted, adding that Triad also fell short over that time in filing necessary disclosures related to customer arbitrations and written customer complaints.
FINRA's proposed rule filing would create a new 10-day fraud delay and nearly triple the maximum hold period for exploited senior investors
Fueled by a recent shot in the arm from private equity firm Carlyle, MAI adds a $490 million Atlanta RIA as it keeps building out its national footprint.
“Todd Burkhalter organized what is likely the largest Ponzi scheme in Georgia history,” said one FBI official.
With experience from Goldman Sachs and TD Ameritrade, the RIA's newest SVP hire adds to a recent wave of executive departures from hybrid Osaic.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
