Fifth Third Securities Ordered to Pay $6 Million for Supervisory Failures Related to Variable Annuities
Fifth Third Securities, a securities brokerage firm based out of Cincinnati, Ohio, was recently fined $4 million dollars and ordered to pay another $2 million in restitution for numerous supervisory failures. FINRA (the Financial Industry Regulatory Authority) found that between May 2008 and September 2014, Fifth Third Securities had several supervisory missteps, including its failure to adequately supervise the exchange of variable annuities.
FINRA alleged that Fifth Third Securities was previously the subject of a regulatory action in 2009, where FINRA alleged that Fifth Third Securities failed to adequately supervise variable annuity transactions. Despite this prior action, FINRA alleged that Fifth Third Securities failed to correct its prior misdeeds. FINRA alleged that Fifth Third Securities sold over $165 million in variable annuities during this timeframe and generated over $8 million in commissions from these sales. FINRA also alleged that Fifth Third Securities representatives made material misrepresentations and omissions in connection with the variable annuity exchanges.
Brokerage firms like Fifth Third Securities have a responsibility to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado; Seattle, Washington; and Ann Arbor, Michigan. We represent investors in FINRA arbitration proceedings in all 50 states. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: Fifth Third Securities FINRA AWC
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