Massachusetts securities regulators have charged Securities America with supervisory failure after one of its independent advisors aired “deceptive” radio ads that “exploited the dangers of Alzheimer’s disease in order to gain access to senior clients.”
Secretary of the Commonwealth William Galvin is seeking a cease and desist order and censure of the Ladenburg Thalmann-owned (LTS) independent broker-dealer and advisor Barry G. Armstrong related to the advertising and marketing efforts. The regulator, who announced the news early Wednesday, also wants to require the IBD to obtain an independent compliance consultant and for both Securities America and Armstrong to pay an administrative fine.
According to Galvin’s office, Armstrong “ran a grossly deceptive AM radio advertising campaign targeted at vulnerable Massachusetts senior citizens.” The advisor hosts a regular radio show that airs on several AM radio stations and “wrote and voiced the ads.”
The radio ads, which aired in the summer of 2014, “implied that the agent is an individual with access to special medical and support information,” the Massachusett’s regulator’s office said in a statement. “He is neither.”
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In fact, Armstrong “is a financial professional looking to grow his business with senior clients,” according to the state’s complaint.
FINRA records show that Armstrong, a 30-year industry veteran, has a history of legal and regulatory issues. Prior to Securities America, he was affiliated with New York Life Securities (1984-1986), 1717 Capital Management of Newark, Deleware (1986-2003), and Woodbury Financial Services of Needham (2004-2007).
The advisor’s ads urged listeners to call the Needham-based advisor for free information on Alzheimer’s, the regulator says. Armstrong’s staff then called the listeners and mailed them marketing materials “as well as a freely available fact sheet on Alzheimer’s published by the National Institute on Aging.”
For its part, Securities America says it “disagrees with the Masssachusetts Securities Division’s enforcement action and will vigorously defend against the allegations brought,” according to Janine Wertheim, senior vice presisdent and chief marketing officer.