The Financial Industry Regulatory Authority (FINRA) has negotiated with brokerage firm Next Financial Group Inc. to settle a variety of violations, including the failure to catch a broker’s excessive trading and poor supervision of variable annuity sales. As part of the settlement, Next Financial has agreed to pay FINRA a $750,000 fine.
Fine Stems from Recent Industry Violations
The current fine stems from industry violations dating back to August 2012. From August 2012 to September 2015, Next Financial failed to detect excessive trading in a senior investor’s accounts that resulted in losses of $392,000 and total gross commissions of $148,000 for an unnamed broker. According to the settlement, Next fired the broker and settled with the customer for $387,000.
FINRA claims that Next Financial also had problems with the supervision of sales of variable annuities, which accounted for a significant part of its revenues, during that period.
According to FINRA, the firm’s supervision of variable annuity transactions fell short. Instead of establishing and utilizing systematic procedures to identify inappropriate VA exchanges, the firm relied on manual identification by its principals. In addition, FINRA says that Next Financial failed to provide guidance or tools to assist the reviewers in evaluating whether exchange rates were excessive.
Next Financial Has History of FINRA Violations
Next Financial Group has a history of FINRA violations dating back to 2009. They’ve been in trouble for a variety of issues, including the sale of fraudulent private placements, excessive trading, and excessive broker commissions. From 2009 to 2014, FINRA fined Next $1.54 million and ordered it to pay $2.1 million in restitution. Though the firm responded by adopting new corrective measures, FINRA claims these procedures were flawed, ultimately allowing this latest misconduct to occur.
Are You a Victim of Securities Fraud?
If you lost money as a result of investing with NEXT Financial or believe you are the victim of securities fraud, contact a qualified securities fraud attorney today.
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If you are looking for an attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.