Michael Jeffery Wiseman, broker formerly employed by Boston, Massachusetts-based LPL Financial LLC, submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he made appearances on a talk radio show in which he made statements regarding a variable annuity that were not fair and balanced. During several of his radio appearances, Mr. Wiseman generally referenced a variable annuity he had been recommending to his clients. Mr. Wiseman's comments focused on the guarantees offered by the variable annuity, particularly the guarantee against loss of principal, making claims such as the investor "can't lose money." During some of those appearances, Mr. Wiseman noted that the variable annuity was not Federal Deposit Insurance Corporation (FDIC) guaranteed and that the investor would have to hold the product for 10 years in order to receive the guarantee against loss of principal. Mr. Wiseman then encouraged listeners to call him to find out more about the product, stating that "we'll find out if this is an appropriate investment for you." In discussing the variable annuity, however, Mr. Wiseman failed to explain that any such guarantees were dependent on the paying ability of the annuity's issuer. Mr. Wiseman also failed to disclose other material aspects of the investments, such as the negative tax and investment consequences resulting from early withdrawals and the fees, expenses, and surrender charges that investors might have to pay. Mr. Wiseman, of Hermitage, Pennsylvania, was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. The suspension was in effect from August 19 2013 through August 30, 2013.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses stemming from investment guarantee representations by their broker can bring forth claims to recover damages against broker-dealers like LPL Financial LLC, which should consistently oversee its brokers' activities in order to prevent the above-described prohibited conduct.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.