("Five Broker-Dealers Fined $1.65M For Sales Issues," published
at 1:07 p.m. EDT, incorrectly identified McDonald Investments'
current owner. A corrected story appears below.)
DOW JONES NEWSWIRES
The Financial Industry Regulatory Authority fined five bank
broker-dealers a combined $1.65 million for deficient supervision
and procedures related to the sale of variable annuities, mutual
funds and unit investment trusts.
Brokers at each of the firms operated out of branches of
affiliated banks, selling the products primarily to the elderly,
said Finra. The customers were referred by bank personnel and sales
of the products represented a significant portion of each firm's
business.
"Today's actions underscore the need for firms operating bank
branches to have effective systems and procedures in place to
monitor sales of variable annuities, mutual funds, and UITs," said
Finra enforcement chief Susan Merrill.
The biggest fine was $450,000 for IFMG Securities, which was
purchased in 2007 by LPL Financial, a broker/dealer which supports
more than 12,000 financial advisers. Others fined included McDonald
Investments, now part ofUBS AG (UBS), which received a $425,000
fine. Also sanctioned were Wells Fargo & Co. (WFC) with a
$275,000 fine, while PNC Financial Services Group Inc. (PNC) and
J.P. Morgan Chase & Co. (JPM) were each fined $250,000.
In settling each of these matters, none of the firms admitted or
denied the charges, but consented to the entry of Finra's
findings.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com