Comprehensive Asset Management and Servicing Inc. has agreed to pay $475,000 to settle allegations that the firm failed to reasonably supervise representatives' sales of variable annuities, among other complaints.
Between February 2008 and 2012, the Parsippany, N.J.,-based broker-dealer “failed to establish, maintain and enforce a supervisory system and procedures reasonably designed to supervise variable annuity transactions,” according to a Financial Industry Regulatory Authority Inc.
document dated Dec. 9.
Specifically, the firm failed in some cases to obtain customer information, such as customers' ages, investment experience and objectives, for an adequate review of VA transactions, according to the document. CAMS also didn't implement controls so VA applications were forwarded promptly to a principal for approval, and failed to produce evidence of prospectus delivery.
CAMS neither confirmed nor denied the allegations.
“For years now, we have had a new system and controls in place to supervise the processing of variable annuities,” Timothy Smith, president of parent company The Comprehensive Group, said in an e-mail statement. “We note specifically that Finra did not find that any variable annuity trades for clients during that time were unsuitable, just that our system of supervision needed to be enhanced, which as indicated was done quite a while ago.”
Finra is reportedly
seeking a steep fine from the broker-dealer of MetLife Inc., the largest U.S. life insurer, for violations related to VA sales.
On top of the VA allegations assessed to CAMS, the settlement amount covers a few other alleged rule violations related to supervisory obligations, such as review and retention of consolidated reports; review and retention of e-mail; and private securities transactions.
CAMS has approximately 68 branch offices and 243 registered reps.
