Winston Wade Turner, of Sarasota, Florida, a registered representative with Pruco Securities, LLC, and MetLife Securities, Inc., was charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Tuner committed fraud in connection with customers’ variable annuity purchases, participated in unauthorized private securities transactions, and failed to cooperate with a FINRA investigation into allegations of his misconduct. Department of Enforcement v. Turner, No. 2013038398401 (Feb. 25, 2016).
According to the Complaint, from the later part of 2012 through July 2015, Turner deceived several customers regarding exchanges and sales of variable annuity products. The Complaint stated that Turner willfully evaded his firms’ supervision concerning the purchase of variable annuities that Turner recommended and sold customers. Such products, according to the Complaint, were subject to a heightened review due to high commissions, costs, complexity, and other risk factors associated with such.
FINRA alleged that Turner’s furtive tactics were geared towards preventing his firm from becoming aware that customers were being induced by Turner to sell their positions in existing annuities or other investment products and purchase new annuity products through Turner. Turner reportedly urged customers to cash out existing annuities and have funds first directed to their bank accounts prior to customers purchasing new annuity products. By customers acting on Turner’s instructions, customers’ new annuity purchases would not appear, to Turner’s firm, as replacements of former annuities. Turner reportedly submitted documents concerning annuity purchases to his firm that omitted the true source of the customers’ funds. Further, the Complaint indicated that Turner lied to Pruco’s compliance personnel regarding the sources of funds used in customers’ purchases when Turner was questioned regarding such. FINRA alleged that Turner violated FINRA Rule 2010 as a result of his conduct in this regard.
The Complaint additionally indicated that customers were deceived, via Turner, regarding guarantees associated with such annuity products. Turner reportedly led customers to believe that they would receive a minimum rate of interest (growth) in the purchase of such products, when such guarantees were merely associated with annuitization or other income riders. For example, in the case with customer CP, Turner led a customer to rollover assets from her 401(k) in order to invest in a MetLife variable annuity, where such customer was assured by Turner to receive 4.5% in yearly guaranteed interest. Yet, such guarantee was only associated with a guaranteed lifetime income stream (which would actually reduce the market value of CP’s investment via guaranteed withdrawals) as opposed to a guarantee which would increase the market value of CP’s investment. The Complaint indicated that Turner was apprised of the fact that there was no such guarantee with respect to CP’s market value increasing in the manner in which he represented to CP. FINRA alleged that Turner violated Securities Exchange Act of 1934, Rule 10b-5, and FINRA Rules 2010 and 2010 in this regard.
The Complaint alleged that Turner also misstated to CP that there would be no tax consequences regarding withdrawals. FINRA alleges that Turner either knew, or had acted recklessly in not discovering that such tax consequences existed in CP’s case prior to representing to CP otherwise.
Turner, according to the Complaint, also disguised the nature of payments to a customer, leading such customer to believe that the insurance company was providing the customer with a guaranteed payment when in fact the funds were paid by Turner personally.
The Complaint further indicated that with respect to multiple customers’ exchanges into investment products, Turner had prepared and submitted to his firm false applications, customer information forms, and customer questionnaires. FINRA alleges that Turner violated FINRA Rule 2010 and 4511 in this regard.
According to the Complaint, when Turner was associated with Pruco, he failed to properly disclose his outside business activities concerning his appointments with nine insurance companies not associated with Pruco. Turner reportedly earned commissions in excess of $130,000.00 via association with the outside insurance companies. FINRA alleged that Turner’s conduct in this regard is violative of FINRA Rule 3270 and 2010.
FINRA also alleged that Turner induced customers to purchase securities away from Pruco. FINRA alleged that Turner’s failure to gain requisite authorization from his firm concerning certain private securities transactions is violative of FINRA Rule 3040 and Rule 2010.
Finally, FINRA alleged in the Complaint that Turner failed to appear for testimony concerning his alleged misconduct, and additionally failed furnish all information requested by FINRA concerning such. FINRA alleged that Turner has violated FINRA Rule 8210 and 2010 in this regard.
Public disclosure records reveal that Turner has been subject to at least thirteen disclosure incidents. On January 30, 2014, Turner settled a customer dispute for $19,970.47 amid allegations of misrepresentations made by Turner in connection with a variable annuity. On March 27, 2014, Turner settled a customer dispute for $1,853.31 amid similar allegations. On August 3, 2015, Pruco discharged Turner amid allegations of Turner’s unsuitable variable annuity recommendations and concealing to his firm certain information concerning purchases of customers’ annuity purchases.
On December 22, 2015, Turner became subject to a customer dispute in which a customer alleged misrepresentations concerning guarantees associated with annuity purchases. Specifically, the client alleged that Turner stated that the customer’s investment was guaranteed a 5% return, while omitting that the client’s funds would be invested in aggressive positions within a variable annuity; that the customer could incur surrender penalties; and falsified the customer’s risk tolerance, investment objectives, and investment experience. On January 5, 2016, Turner became subject to a pending customer dispute in which a customer is seeking $75,200.00 after alleging similar misrepresentations concerning guaranteed returns.
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