Barry Ronald Block of Arlington Heights Illinois a stockbroker formerly employed by World Equity Group Inc. has been fined $15,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Block made misrepresentations to customers concerning the expenses of variable annuities when advising customers to purchase them and (2) Block altered customers’ signed documents to effect transactions. Letter of Acceptance Waiver and Consent No. 2017052426602 (Feb. 25, 2019).
According to the AWC, between January and March of 2017, a total of eight variable annuity exchanges were recommended by Block to five of the firm’s customers. Apparently, customers had then been provided variable annuity exchange disclosure forms to sign which were misrepresented by Block. In particular, Block falsified information about the fees of annuities customers already had. He also reportedly falsified information about the fees of the annuities Block recommended for customers to purchase through him.
Evidently, before Block and the customers met to discuss the annuity transactions, Block directed an assistant of his to complete information about the Living Benefit Rider fees and the mortality and expense charges for the annuities customers would be purchasing. The AWC stated that when customers finally met with Block, inaccurate information was conveyed on forms designed for comparing customers’ existing annuities with the proposed annuities.
Apparently, Block had not ensured that the information presented to investors was inaccurate. Moreover, Block reportedly conveyed on the disclosures forms that his justification in making the recommendations were the new annuities containing lower overall costs than customers’ existing annuities. FINRA found this rationale to be flawed as it was actually more expensive for the customers to be invested in the new annuities.
The AWC further detailed that the incorrect information about the customers’ existing or proposed annuities had been made known to Block once he was alerted by the firm’s principal. At that time, Block was obligated to have the disclosure forms re-signed by customers. Apparently, instead of following the principal’s directions, corrections were made to the forms through Block or Block’s assistant. Those corrected forms had never been provided to customers for their review and consideration. Consequently, customers were left without knowing the truth – that the annuities they were purchasing had been more expensive than their existing annuities. FINRA stated that the flawed annuity documentation was subsequently submitted to effect the exchanges.
FINRA found Block’s omissions and misrepresentations of expenses, and his supporting rationale of the transactions, to be violative of FINRA Rule 2010. Moreover, FINRA found Block’s alterations of documents signed by customers to be violative of FINRA Rules 2010 and 4511, as the altered documentation caused the firm to maintain inaccurate records and books.
FINRA Public Disclosure additionally confirms that Block is referenced in a customer initiated investment related written complaint which was resolved for $110,000.00 in damages based upon accusations that while Block was associated with Waterstone Financial Group, customers were sold an equity indexed annuity and variable annuity without being provided adequate information about the products; and customers’ disclosure forms contained forged customer signatures. Waterstone Financial Group terminated Block supported by allegations of his forgery and failure to make disclosures to customers about variable annuities.
Block’s registration with World Equity Group Inc. has been terminated as of February 20, 2018.
