Ronald Richard Blasczyk of Manitowoc Wisconsin a stockbroker currently registered with Wells Fargo Clearing Services LLC has been charged by Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that he made unsuitable recommendations for a customer to purchase a variable annuity, and then lied to his firm in regard to his business activities. Department of Enforcement v. Ronald R. Blasczyk Disciplinary Proceeding No. 2016052503101 (Dec. 3, 2018).
According to the Complaint, on June 25, 2015, a seventy-five year old customer, EF, had been advised by Blasczyk to liquidate a variable annuity issued by Voya, which the customer held for a decade. The customer was then allegedly advised by Blasczyk to buy another annuity offered by AIG but this annuity was not appropriate for EF.
The Complaint stated that EF acquiesced to meeting with Blasczyk in July of 2015 in order to complete the forms required for purchasing this new annuity. Apparently, EF’s daughter, PF, attended the meeting with Blasczyk alongside EF to clear up any confusion as to the basis of Blasczyk’s recommendations. The Complaint stated that when EF and PF met with Blasczyk, EF declined to exchange or sell her existing annuity. Indeed, the Complaint stated that Blasczyk was specifically instructed not to exchange or otherwise sell EF’s existing annuity.
FINRA Department of Enforcement alleged that Blasczyk actually liquidated EF’s annuity weeks prior to Blasczyk meeting with EF and PF, and those funds had been placed into EF’s individual retirement account. Blasczyk supposedly failed to advise EF and PF about him liquidating EF’s funds when the meeting transpired in July of 2015. Moreover, Blasczyk allegedly made notations of his meeting with EF regarding the annuities, in which he claimed that EF knew about her annuity being liquidated. EF reportedly knew nothing of this annuity liquidation until October of 2016.
Furthermore, FINRA Department of Enforcement alleged that Blasczyk poorly advised the customer about the annuity exchange given the customers investment profile, risk tolerance, objectives for investing and age. In particular, it was apparently inappropriate for EF’s existing annuity to have been liquidated because doing so would cause EF to forego approximately $150,000.00 in guaranteed income. The Complaint stated that Blasczyk positioned an annuity that contained features that were less beneficial than the annuity that had been liquidated, and this new annuity would have caused EF to be subject to surrender charges for nine years.
Additionally, FINRA stated that Blasczyk did not have an adequate basis to conclude that his recommendation was appropriate for EF because of Blasczyk’s failure to understand the terms and conditions of both the variable annuity that EF had at Voya and the annuity that he recommended the customer to buy with the Voya annuity proceeds. In particular, he told the customer that she earned no more than a 2.3 percent returns annually by investing in the variable annuity issued by Voya, and indicated that EF’s Voya investments matched or exceeded the amount that the State of Wisconsin insured. Yet, FINRA Department of Enforcement claimed that both of those statements were untrue.
The Complaint alleged that Blasczyk’s unsuitable recommendations to EF concerning the liquidation of the variable annuity issued by Voya, and the purchase of a variable annuity issued by AIG, was unsuitable and violative of FINRA Rules 2010 and 2111.
The Complaint additionally alleges that Blasczyk made misleading or false records within Wells Fargo’s records in regard to his interactions with EF by claiming that (1) EF and PF knew when meeting with Blasczyk that the Voya annuity had been liquidated and (2) EF and PF had been consulting with someone regarding the use of those proceeds. FINRA Department of Enforcement alleged Blasczyk’s conduct in this regard was violative of FINRA Rule 2010.
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