UPDATE July 2016– FINRA records disclose that Darrell G. Frazier has 17 customer disputes pending and 21 customer disputes that are final. Frazier was employed by MML Investors Services from 8/2010-5/2011. Prior to that he was employed by Park Avenue Securities.
August 2013-Dublin, Ohio
The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. FINRA’s chief role is to protect investors by maintaining the fairness of the U.S. capital markets.
All stockbrokers and broker dealers (brokerage firms) are required to be licensed by and subject to the rules and regulations of FINRA. Each month FINRA publishes disciplinary actions against brokers and broker dealers. Discipline can range from monetary fines and suspensions, or in extreme cases, revocation of licensing and a bar from the securities industry.
Darrell Glynn Frazier (CRD #1663429, Registered Representative, Dublin, Ohio-not currently registered, formerly with MML Investors Services, LLC, prior to that Park Avenue Securities, LLC. ) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Frazier consented to the described sanction and to the entry of findings that he made false representations in connection with the sale of variable annuities. The findings stated that as a result of this conduct, Frazier willfully violated Section 10(b) of the Securities Exchange Act of 1934, FINRA Rules 2010 and 2020, and NASD Rules 2110 and 2120.
Frazier told customers that they would earn a return of 7 percent or
more by purchasing variable annuity products and that the principal
amount they invested through the variable annuity would be guaranteed against loss. Frazier assured one customer that he would not be charged annual fees on his variable annuities, and advised another customer that he, Frazier, would only make money from the annuity purchase if the customer made money. All of these representations and assurances were false.
The findings also stated that some of the customers separately contacted Frazier to question why a particular annuity was not performing as expected. The customers questioned why they were not seeing the guaranteed 7 percent return reflected in account documents, and why the values of their annuities appeared to be decreasing. Frazier assured them that they were receiving the 7 percent return and that their principal was safe.
The findings also included that Frazier separately told customers that the 7 percent return had not yet been added to their annuity but soon would be, that an annuity was making money but that the 7 percent return would only be reflected on annual, not quarterly, statements, that for various reasons, he had not been able to obtain documents reflecting the 7 percent return; and in response to why the value of his annuity seemed to be declining, Frazier promised to look into the matter, but never did.
FINRA found that Frazier made unsuitable allocation recommendations to his variable annuity customers. The customers had not completed college and had little investment experience. All were at or near retirement age, were of moderate means and expressed concerns about losing their principal. Nevertheless, at various times during the terms of their variable annuity contracts, Frazier recommended that the customers allocate most or all of their annuity assets to a single investment portfolio, and often the portfolio he recommended involved high-risk investments. Frazier’s recommendations to over concentrate assets in high-risk investments were unsuitable for customers who were at
or near retirement, had only moderate means, and were concerned about preservation of principal.
FINRA also found that Frazier recommended that customers take out home mortgages from their paid-off homes and invest the proceeds into variable annuities.
Some customers followed this advice. Frazier convinced customers to use profits from their annuities to purchase duplicative or excessive insurance policies, and arranged for systematic withdrawals from the variable annuities to pay the insurance premiums.
The withdrawals to pay the insurance premiums resulted in several customers incurring additional tax liability and surrender charges. Frazier also recommended that a customer, whose variable annuity was beyond the surrender period and was no longer subject to deferred sales charges, sell the annuity and invest the proceeds in a new variable annuity, exposing her to a new period of deferred sales charges. These strategies produced additional compensation for Frazier but were unsuitable for the customers.
In addition, FINRA determined that Frazier often completed or partially completed forms that the customers were required to fill out when applying for a variable annuity contract. Several of the forms Frazier completed were inaccurate. Frazier overstated the net worth and income of customers and inaccurately characterized their risk tolerances. Frazier regularly had customers sign undated, blank
brokerage forms. Such signed, but otherwise blank forms were located among his files, along with correspondence specifically instructing customers to sign but not date blank forms.(FINRA Case #2010023442901)
If you have losses in an account handled by Darrell G. Frazier you may be able to recover damages through FINRA arbitration.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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