Tag Archives: sws financial annuity problem

SWS Financial Services Named In Complaint by Securities Regulators Over Variable Annuity Sales

September 29, 2014- Dallas, Texas

The Financial Industry Regulatory Authority (FINRA) filed a complaint against SWS Financial Services alleging that from September 2009 to May 2011 it had inadequate supervisory systems to supervise its variable annuity business.

SWS Financial Services (SWS) was formed in 1986, is headquartered in Dallas, TX, and has 313 registered representatives operating from 189 offices.

Allegations made by FINRA in the complaint include:

  • SWS derived 16%-20% of its total revenues from the offer and sale of variable annuities to customers
  • over 70% of non-OSJ applications for variable annuities were submitted without having been reviewed by an SWS securities principal
  • suitability reviews of variable annuity transactions were inadequate

If you have losses on a variable annuity purchased from SWS Financial Services, you may be able to recover damages. Contact us for more information.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

SWS Financial Services Hit with Suit by Regulators Over Improper Variable Annuity Sales

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Richard Ohlhaber-Former Southwest Securities Broker-Barred by FINRA-Southlake Texas

UPDATED June 2015 

Richard Martin Ohlhaber (CRD #2154794, Registered Principal, Keller, Texas) submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Ohlhaber consented to the described sanction and to the entry of findings that he participated in the sale of life settlement contracts offered by a company to at least 18 customers without providing written notice of his involvement in the sales of the life settlement contracts to either of his FINRA member firms, and never obtained either firm’s permission to engage in such outside business activity. The findings stated that Ohlhaber received commission checks from the company totaling over $300,000. These checks were addressed to an entity whose sole members were Ohlhaber and his wife. Ohlhaber endorsed these checks and deposited them in the entity’s bank account. Ohlhaber had access to this bank account and withdrew or otherwise used the money contained in this bank account. The company was not an approved product at either of Ohlhaber’s firms. Ohlhaber completed questionnaires at both firms in which he represented that he was not engaged in any outside business activity, and he misrepresented to one of the firms that the entity was a “shell” that was not engaged in any business.

The findings also stated Ohlhaber provided false sworn testimony which was material to FINRA’s investigation and as a result, impeded the investigation. The findings also included that Ohlhaber loaned money to customers who were not Ohlhaber’s family members. Ohlhaber never informed his firm about these loans and the firm never pre-approved the loans in writing. The firm’s WSPs only permitted loans between registered representatives and customers who are the registered representative’s immediate family members. ( FINRA Case #2012032077901)

FINRA records indicate that Ohlhaber’s recent registration history is:

FSC Securities – Grapevine, TX  8/2010-11/2012

Southwest Securities, Inc. , SouthLake, TX 5/2008-4/2012

As of June 2015, there are two pending customer disputes reported on Ohlhaber’s FINRA records:

  • A $60,000 claim alleging violations of Texas Securities Act, Texas Deceptive Trade Practices-Consumer Protection Act, fraud and misrepresentation related to a life settlement contract
  • A $450,000 claim alleging misrepresentation with respect to the tax consequences of the surrender of a variable annuity.

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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870