The Financial Industry Regulatory Authority (FINRA) has fined eight firms, including Voya Financial Advisors and five broker-dealer subsidiaries of Cetera Financial Group a total of $6.2 million, ordering them to pay more than $6 million to customers who purchased potentially problematic L-share variable securities.
The L-share variable annuities were sold by Voya, Kestra Investment Services, FTB Advisors and the five Cetera groups: Cetera Advisor Networks LLC, Cetera Financial Specialists, First Allied Securities Inc., Summit Brokerage Services Inc., and VSR Financial Services Inc. According to FINRA, the securities had “potentially incompatible, complex and expensive long-term minimum income and withdrawal riders.”
The Cetera-related entities will pay the lion’s share of the fine, paying $2.95 million, with Voya fined $2.75 million. Kestra was fined $475,000 and FTB was fined $250,000. Voya must pay a minimum of $1.8 million to customers and the Cetera companies owe more than $4.5 million to customers who purchased the L-shares.
FINRA stated that L-share variable annuities are complex investment products that require a high level of comprehension and diligence by brokers who sell them and the brokers’ supervisors. The products combine insurance and securities features designed for short-term investors willing to pay higher fees in exchange for shorter surrender periods. Many of these products also came with costly withdrawal penalties, which Voya and others failed to identify and flag as potentially unsuitable for its investors.
Have You Invested with Voya or Cetera Financial Group?
If you invested with Voya, Kestra, or one of the aforementioned Cetera groups, you may have certain legal rights that require your immediate attention.
Contact an experienced Los Angeles securities fraud attorney today to discuss your rights and options.