J.H. Darbie Co. Inc. a brokerage firm headquartered in New York New York has been censured and fined $25,000.00 by Financial Industry Regulatory Authority (FINRA) based upon consenting to findings that the firm failed to supervise recommendations of variable annuities made by one of the firm’s registered representatives. Letter of Acceptance Waiver and Consent No. 2015043369501 (Apr. 11, 2018).
According to the AWC, between October of 2014 and September of 2015, the firm enabled its registered representative, WP, to advertise and sell variable annuities without supervision. Throughout this period, WP reportedly utilized advertisements, letters and e-mails to encourage prospective customers to buy into WP’s investment strategy that involved the purchase of variable annuities.
The AWC stated that WP’s communications were flawed, in that WP informed prospective customers that no costs would be incurred by them in pursuing WP’s investment strategy despite the fact that customers would, in fact, incur costs. Evidently, WP’s wrongdoing was not detected by the firm because of the firm’s failure to supervise WP’s activities. FINRA found that the firm’s failure to supervise WP’s activities was violative of FINRA Rules 2010 and 3110 as well as National Association of Securities Dealers (NASD) Rule 3010.
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