By: Jack Waymire | August 10, 2009 | Deceptive Sales Practices
The Financial Industry Regulatory Authority (FINRA) announced it was fining Ameritas Investment Corporation $100,000 for failing to adequately supervise one of its brokers. The New Jersey based broker, Nancy Ziering, was fined $60,000 and suspended for nine months for convincing 220 investors to borrow against the equity of their homes to buy Variable Universal Life (VUL) insurance policies.
Ziering used questionable financial plans to convince investors to buy these products to fund college tuitions for their children and comfortable, secure retirements. The reality is the VUL products generated very large commission payments to Ziering.
Ameritas received a slap on the wrist for failure to supervise. At least 90 of the products that Ziering sold were produced by Ameritas. The revenue from 90 VUL policies was more than the $100,000 fine. For them, the fine was a cost of doing business. The company is no worse off financially.
Ziering’s commissions were also more than her $60,000 fine which she can use to fund her nine month vacation. In a matter of months she will be back, fully licensed, ready to sell investment and insurance products to unsuspecting investors who will not take the time to check her compliance record.
Financial advisors do not come with warning labels, but they should.
One Response to “What Fines for Cheating Investors?”
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Mark Astarita
August 10th, 2009 at 6:37 pm
Or maybe not. While I know nothing about this case, I do know something about broker registration (www.seclaw.com, http://www.beamlaw.com for more). Brokers must be registered not only with FINRA, but with the states. A FINRA suspension triggers an automatic state suspension, and some of the states refuse to re-license the broker after one of these suspensions.