On September 29, 2014, the Department of Enforcement of The Financial Industry Regulatory Authority (FINRA) filed a complaint against SWS Financial Services, Inc. alleging that from September 2009 to May 2011, SWS had inadequate supervisory systems and written supervisory procedures to supervise sales of variable annuities (VAs).
SWS Financial, headquartered in Dallas, TX, has been a FINRA member since 1986 and has about 189 branch offices employing 313 brokers.
FINRA alleges that SWS Financial Services, Inc. did not perform adequate reviews of applications for variable annuities and failed to monitor whether annuities were inappropriately exchanged. FINRA also alleges that VAs were sold to customers without a reasonable basis to believe that the investment was suitable.
The sale of variable annuities can be quite profitable for broker dealers and FINRA states that up to 20% of the total revenues of SWS Financial was attributable to the sale of variable annuities for the time frame involved.
According to the SEC: “A variable annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments. In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date. You can choose to invest your purchase payments in a range of investment options, which are typically mutual funds. The value of your account in a variable annuity will vary, depending on the performance of the investment options you have chosen.”
While variable annuities can be appropriate investments, we often see cases where they are inappropriate if too much of an investor’s liquid net worth is tied up. In addition, there are generally hefty surrender fees if an investor needs or decides to liquidate the annuity, a fact not always understood by investors.
If you or one of your loved ones has questions about an annuity investment you made with SWS Financial, call to discuss your legal options.
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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