The Leaders Group Inc. a brokerage firm headquartered in Littleton Colorado has been censured and fined $95,000.00 by Financial Industry Regulatory Authority (FINRA) based upon consenting to findings of supervisory failures including the firm’s failure to supervise variable annuity suitability as well as registered representatives’ outside business activities. Letter of Acceptance Waiver and Consent No. 2014038972001 (July 2, 2018).
According to the AWC, between May of 2012 and September of 2014, the firm neglected to create and implement an adequate supervision system to examine suitability of contributions made by customers to annuities when done so at the recommendation of a registered representative of the firm. The AWC stated that the firm’s variable annuity supervision was lacking in circumstances where a customer of the firm bought an annuity based on a registered representative’s advice but did not make significant contributions until a subsequent time. Evidently, those contributions had been provided to the issuer of the annuities prior to the firm conducting a review for suitability. Consequently, the firm failed to ensure that annuity contributions were suitable for customers; conduct violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 3010(a).
The AWC further revealed that the firm failed to evaluate outside business activities pursued by registered representatives of the firm. Evidently, the firm’s written supervisory procedures called for outside business activities to be evaluated and documented by the firm. A number of registered representatives made outside business disclosures to the firm from May of 2012 to September of 2014; however, the firm failed to produce any records which demonstrated that it actually reviewed and assessed the activities reported by registered representatives. Consequently, FINRA found that the firm’s conduct was violative of FINRA Rules 2010 and 3270 as well as National Association of Securities Dealers (NASD) Rule 3010(b).
The information contained herein has been obtained from reliable sources however may not be accurate and is not guaranteed by us. Readers are encouraged to undertake their own independent investigation and evaluation of the relevant facts. All claims and allegations are subject to adjudication, decisions may be subject to appeal, and no inference is intended, nor should any inference be made from any information contained herein from any source.
This posting and the information on our website is for general information purposes only. This content should be not considered legal advice, and any responses, comments, e-mails, other communications do not form any attorney client relationship. Attorney Advertisement. See Important Disclaimer
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
