Advisor Group’s SagePoint Financial agreed to pay more than $1.6 million in restitution and fines tied to its early rollovers of unit investment trusts, according to the Financial Industry Regulatory Authority.
Without admitting or denying FINRA’s claims, Jeff Auld, president and CEO of SagePoint, signed a letter of acceptance, waiver and consent June 1 in which he said the company agreed to be censured and pay a $300,000 fine and restitution of $1.32 million to the affected customers.
FINRA accepted the letter Wednesday. Advisor Group didn’t immediately respond to a request for comment Friday.
From January 2013 through December 2017, SagePoint failed to establish and maintain a supervisory system and failed to establish, maintain and enforce written supervisory procedures that were reasonably designed to supervise the suitability of representatives’ recommendations to customers for early rollovers of UITs, according to FINRA.
During the relevant period, SagePoint executed more than $895 million in UIT transactions that generated more than $17.2 million in sales charges, according to FINRA. The transactions included more than $203.7 million in proceeds from sales more than 100 days before the UITs’ maturity dates in which some or all of the proceeds were used to purchase one or more new UITs (early rollovers), the regulator alleged.
About $65.8 million of the proceeds were for transactions in which customers sold UITs more than 100 days prior to their maturity dates and used some or all of the proceeds to buy a subsequent series of the same UIT, according to FINRA.
Based on its actions, SagePoint violated NASD Rule 3010 (for conduct before Dec. 1, 2014) and FINRA Rule 3110 (for conduct on or after Dec. 1, 2014) governing supervision rules, and FINRA Rule 2010 governing standards of commercial honor and principles of trade, the regulator said.
The SagePoint news comes only about two weeks after Stifel Nicolaus agreed to pay $3.6 million for early UIT rollovers from 2012 to 2016 and five months after Oppenheimer agreed to pay $4.7 million for early UIT rollovers from 2011 to 2015.