American Investors Group Fined By FINRA Over Church Bond Pricing

In March 2014, FINRA fined American Investors Group, Inc. of Minnetonka, Minnesota, $35,000 in connection with findings that the firm did not have adequate supervisory systems and procedures to ensure fair pricing of church bonds in the secondary market. FINRA found that with regard to church bonds traded in the secondary market, the firm did not conduct adequate ongoing due diligence.

Because the firm was the only participant in this secondary market, it set the prices at which it repurchased and resold church bonds as its own discretion and had no market price or other external reference upon which to rely.
The findings also stated that the firm published fliers and had a publicly available website in connection with the church bond sales and some of this information did not provide a fair and balanced presentation of the risks and rewards of the church bonds they promoted.
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