Christopher T. Dallas of Arlington Heights Illinois a stockbroker and supervisor currently employed by World Equity Group Inc. has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any supervisory capacity based upon consenting to findings that Dallas failed to supervise variable annuity transactions effected by the firm’s brokers. Letter of Acceptance Waiver and Consent No. 2017052426601 (Feb. 5, 2019).
According to the AWC, during the time that Dallas was World Equity Group’s home office principal, Dallas was responsible for making sure that all of the firms direct business transactions had been reviewed and authorized, including variable annuity transactions. Particularly, Dallas was required to see that the customers provided a Variable Annuity Disclosure Form in reference to their purchases or exchanges of deferred variable annuity products. Apparently, the Disclosure Forms were supposed to be signed and dated by both the customers and the registered representatives who executed the customers’ purchases.
Dallas was reportedly responsible for reviewing the annuity documentation, including the Variable Annuity Disclosure Form, for completeness by the customer and representative. The AWC stated that Dallas was also responsible for making a determination about the suitability of the annuities for the customers purchasing the products. Additionally, Dallas was responsible for analyzing the fees of the annuities that the customers sought to replace with the annuities offered through World Equity Group.
Evidently; however, at least four variable annuity transactions had been approved by Dallas on March 2, 2017, where Dallas knew that the documentation had been altered following the customer’s signatures. Apparently, one of the firm’s brokers, BB, completed the annuity documentation and furnished the forms to Dallas’ attention after the customer signed them. Dallas reportedly learned of incorrect or abnormal information being placed on the forms about the customers’ rationale for making the annuity exchange and basis of the fees pertaining to the exchanges.
The AWC stated that Dallas informed the representative about the inaccuracies which necessitated a customer signing new documentation. Thereafter, the AWC stated that the registered representative provided Dallas with altered documentation; documentation that was not changed by the customer. The AWC revealed that Dallas’ knowledge of the altered documentation placed him in a position where he was not adequately supervising the transactions to ensure that they were in compliance with FINRA Rule 2330 – a rule which mandates the supervisor’s review of annuity transactions for completeness and accuracy. Consequently, FINRA found Dallas’ conduct violative of FINRA Rules 2010, 3110(a) and 3110(b).
Dallas has been registered with World Equity Group Inc. since June 1, 2011.
