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SunTrust International Center
Miami, Florida 33131

FINRA Sanctions Florida-Based Brokerage Firm for Failure to Supervise

Transamerica Financial Advisors, Inc. (CRD No. 16164/SEC#: 801-38618,8-33429) is a large brokerage firm headquartered in St. Petersburg, Florida. Founded in 1985, Transamerica Financial Advisors has licenses to operate in 53 U.S. states and American territories. According to FINRA the broker-dealer has 25 disclosure, including 19 regulatory events and three securities arbitrations.

In December of 2020, this Florida-based brokerage firm was subject to sanctions. FINRA alleges that it failed to properly supervise its securities representatives—resulting in thousands of material misstatements to customers. Here, our Miami investment fraud lawyers discuss the Letter of Acceptance, Waiver, and Consent agreed to by Transamerica Financial Advisors, Inc.

Letter of Acceptance, Waiver, and Consent: Transamerica Financial Advisors, Inc. 

Background Information 

According to FINRA, the underlying allegations at issue in this case occurred between January of 2009 and November of 2016 (Disciplinary Action NO. 2015048250401). During that time, regulators believed that variable annuities and other similar structured financial products made up approximately 40 percent of the total business of Transamerica Financial Advisors. However, FINRA contends that the Florida-based broker-dealer lacked an adequate supervisory system to oversee variable annuity sales. 

Violative Conduct  

As a consequence of the inadequate supervisory system, FINRA alleges that many Transamerica Financial Advisors representatives made material misstatements to customers—the misstatements were impactful, causing significant financial harm to investors. Here are three specific allegations raised by FINRA investigators:

  1. Transamerica Financial Advisors failed to properly supervise variable annuity recommendations;
  2. Transamerica Financial Advisors failed to properly supervise variable annuity exchange recommendations; and
  3. Transamerica Financial Advisors failed to properly supervise the sale of some mutual funds.

The material misstatements came in a wide range of different forms. For example, regulators believe that some financial advisors made recommendations that resulted in investors—both individuals and institutions—incurring unnecessary and avoidable early-surrender fees. Taken together, FINRA’s investigators assessed that Transamerica’s customers suffered nearly $4 million in financial harm as a consequence of misstatements made by securities representatives. 

Brokerage Firm Sanctions 

Licensed brokerage firms have a basic responsibility to supervise financial advisors. A supervisory system should be designed to protect the interests of investors. In this case, the agency alleges that the firm fell short of a number of different securities industry regulations, including FINRA Rule 2330, FINRA Rule 3110, and FINRA Rule 2010. Without admitting or denying FINRA’s findings, Transamerica Financial Advisors consented to the agency’s proposed penalties. Specifically, the Florida brokerage firm is subject to a:

  • A censure;
  • A $4.4 million fine;
  • More than $3.9 million financial restitution to affected customers.

Call Our Florida Failure to Supervise Investment Fraud Lawyers for Help

At ​Carlson & Associates, P.A., our Miami securities fraud attorneys know how to hold negligent brokerage firms accountable. We have experience handling complex failure to supervise claims. If you suffered financial losses because of your broker-dealers failure to supervise a representative, we are here to help. Reach out to us now for a completely confidential initial consultation. Our firm represents investors in Miami and throughout Southeastern Florida.

Resources:

brokercheck.finra.org/firm/summary/16164

.finra.org/sites/default/files/fda_documents/2015048250401%20Transamerica%20Financial%20Advisors%2C%20Inc.%20CRD%2016164%20AWC%20sl%20%282021-1611188411999%29.pdf

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