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ARTICLE · 11 MAY 2021

Firm Settles FINRA Charges For Supervisory Failures On Variable Annuity Transactions

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A firm settled FINRA charges for failing to properly supervise certain types of variable annuity transactions and to monitor variable annuity exchanges.

United StatesFinance and Banking
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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A firm settled FINRA charges for failing to properly supervise certain types of variable annuity transactions and to monitor variable annuity exchanges.

In a Letter of Acceptance, Waiver, and Consent, FINRA stated that the firm's reviewing principals could not reasonably determine the suitability of a variable annuity exchange because the firm did not analyze material information regarding (i) living benefit riders and (ii) buffer annuities. Specifically, FINRA found that the firm did not:

  • include on its disclosure forms a comparison of the existing annuity's living benefit value and the potential loss of value due to the exchange;
  • require its registered representatives to enter the living benefit value into the firm's electronic system; and

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