October 29,2014-Amherst New York
The Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) filed a disciplinary complaint against Peter Michael Terlecky, for circumventing his firm’s supervisory and compliance procedures by concealing and failing to process 26 variable annuity purchase transactions totaling over $2 million.
According to the compliant Terlecky concealed the replace of annuities with new annuities by structuring them as separate trades rather than through annuity exchanges as required by firm policy. He accomplished this by transferring the proceeds of the annuity sale to a money market account, and then after waiting a few days, using the funds to purchase a new variable annuity.
By doing this Terlecky was able to earn greater commissions and to conceal the annuity replacements from the firm’s compliance department.
According to the complaint, customers suffered harm by being deprived of receiving disclosures of material facts regarding annuity replacements and the opportunity of performing a meaningful comparison between the annuities they were selling and those being purchased. In ten instances, the complaint alleges that customers unnecessarily incurred new seven year surrender periods with their replacement variable annuities.
Terlecky was registered with Princor Financial Services Corporation at the time of the alleged wrongdoing. He was permitted to resign from Princor Financial in August of 2011 after an internal investigation revealed the annuity swapping. According to FINRA records Terlecky has been registered with MML Investors Services since November 2011.
If you believe you have been the victim of annuity churning or annuity swapping, contact us to discuss how you may be entitled to damages.
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.
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