Malay Kumar, of Mason, Ohio, a stockbroker registered with Cambridge Investment Research Inc., has been fined $10,000.00 and suspended for one year from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Kumar made unsuitable recommendations in annuities and falsified documents when he was associated with Cambridge Investment Research Inc. Letter of Acceptance, Waiver, and Consent No. 2022077257801 (November 30, 2023).
According to the AWC, between June of 2018 and October of 2021, Kumar recommended deferred variable annuity exchanges to seven customers without a reasonable basis for believing those recommendations were suitable or in the best interests of his customers. He failed to conduct a proper comparative analysis between the old and new contracts, and he did not identify in the transaction documents any disadvantages of pursuing these annuity exchanges. These exchanges led to financial burdens for the customers, including $50,103.43 in surrender fees and the loss of living benefit riders in their existing annuity contracts. FINRA found that Kumar violated FINRA Rules 2010 and 2111.
Additionally, FINRA stated that from May of 2018 to October of 2021, Kumar failed to submit eighteen variable annuity purchases as annuity replacements, despite these being funded by the sale of a different variable annuity. Instead, Kumar stated on documents that the purchases would be funded through savings, CDs, or qualified retirement accounts. For sixteen purchases, Kumar indicated in disclosure forms that his customers did not exchange or surrender any annuity within the last three years despite Kumar having helped a customer surrender an annuity less than two months following a purchase. He violated FINRA Rules 4511 and 2010 by submitting false statements on paperwork in connection with these annuity transactions, in turn causing the securities broker dealer to have incorrect records and books.
King was associated with Cambridge Investment Research Inc. between January 10, 2018, and December 21, 2021.