Podcast Center
Video Center
Webcasts
Resource Center
Events
August 24, 2009 at 08:00 PM
Fines for alleged wrongdoing in variable annuity sales are starting to mount up at the Financial Industry Regulatory Authority.
By mid-year, the self-regulatory agency had already imposed at least $3.4 million in such fines.
The fines include a $1.75 million fine on a firm for alleged unsuitable transactions in April 2009 and more recently, $1.65 million in fines on five bank broker-dealers for inadequate oversight. (See related article here )
By comparison, in 2008, VA sales accounted for only $295,000 in FINRA enforcement fines, according to the Sutherland law firm in Washington, D.C. (See related article here ).
From $295,000 to $3.4 million is a huge jump, and, again, this is the only mid-year number.
It seems VA sales fines are approaching the soaring totals usually assigned to mutual fund sales fines. In 2008, for instance, mutual funds were hit with a total of $4.5 million in FINRA fines, according to Sutherland.
One can only speculate as to the reasons for the shift.
It could be that VA sales have suddenly taken a turn for the worse, in terms of compliance with FINRA regulations.
Or it could be a mere matter of happenstance–i.e., several FINRA investigations involving VAs just happened to come to fruition this year, and each case involved violations that were so egregious that the penalties had to be huge.
