Finra fines Fifth Third $1.75M for improper VA trades
The Financial Industry Regulatory Authority said Tuesday that it has fined Fifth Third Securities Inc. $1.75 million for a series of violations related to variable annuities transactions.
The Financial Industry Regulatory Authority said Tuesday that it has fined Fifth Third Securities Inc. $1.75 million for a series of violations related to variable annuities transactions.
Finra, an independent regulator of the securities industry, said it found that Fifth Third Securities, which is a unit of Cincinnati-based Fifth Third Bancorp, made 250 unsuitable sales and exchanges to 197 customers through 42 individual brokers between January 2004 and December 2006. The regulator also found that the company’s supervisory systems and procedures were inadequate for “policing” the firm’s variable annuity transactions.
Variable annuities are retirement investment products that ensure a minimum regular payout.
In addition to the fine, Finra has ordered Fifth Third Securities to pay more than $260,000 in restitution to 74 customers to compensate them for surrender charges incurred in the unsuitable transactions.
The firm must also offer all 197 customers the opportunity to rescind their unsuitable transactions and receive the initial value of their purchase plus interest and any surrender charges required, adjusted for any withdrawals made.
The investigation is ongoing, Finra said in a statement.
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