FINRA sanctioned six broker-dealers a combined $740,900—which includes fines and restitution—for failing to apply discounts to eligible customer purchases of non-traded real estate investment trusts (REITs) and business development companies (BDCs). Voya Financial Advisors, Inc. took the biggest hit—a censure, $325,000 fine and $41,853.20 restitution settlement—while National Planning Corp. received the smallest total penalty—a censure, $30,000 fine and $16,411.09 restitution order.
Transamerica Financial Advisers was ordered to pay an $85,000 fine and $51,000 in restitution, Investacorp Inc. received a $50,000 fine and $27,400 of restitution, J.P. Turner & Co. was fined $45,000 and ordered to pay $21,200 in restitution, and Cetera Investment Services received a $30,000 fine and order to pay $17,900 in restitution.
The combined $175,900 in restitution accounts for the amount customers at the six firms overpaid for the REITs and BDCs.
According to FINRA, the firms failed to maintain adequate supervisory systems for the REIT and BDC products, leaving brokers and supervisors responsible for identifying when to apply volume discounts to the REIT/BDC purchases. When the frontline representatives failed to identify and apply these discounts, the firm likewise failed to detect and/or act on this oversight, causing it to overcharge customers for REITs and BDCs.
The report states that the violations and overpayment occurred from 2009 through 2014 in five of the firms, while the sixth—Transamerica—purportedly failed to apply the volume discounts to eligible customers from 2012 through 2014.
If you have invested with Voya Financial Advisors, Transamerica Financial Advisers, Investacorp, J.P. Turner & Co., Cetera Investment Services, National Planning Corp., or with any broker, financial adviser or firm whose failure to identify and apply REIT volume or other discounts for eligible purchases, and this failure to offer a fair discounted price has proven harmful to your investments or interests through overpayment or other financial damage, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
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