Secretary of State William Galvin is accusing Texas-based brokerage firm Investment Professionals of selling investment products to elderly customers even though the investments were not suitable for them. The San Antonio broker-dealer allegedly ran high-pressure sales contests at several partner community banks in the New England state between 2013 and 2016. Galvin said that the purported “sales gimmicks” were “unacceptable” and that his office would not tolerate them.
The Texas-based brokerage firm allegedly prioritized sales volume over whether or not the investments they were selling were suitable for the older customers. The customers had accounts at the local Massachusetts banks. For example, one bank customer, who was suffering from terminal cancer, saw so many of her assets placed in a variable annuity that she could not access her savings.
Galvin charged that these sales contests were not in alignment with Investment Professionals’ own procedures and policies and his office accused the firm of inadequate supervision, in particular of the Texas broker-dealer’s representatives who worked out of the Massachusetts banks. He noted that sales contests are “contrary to investor protections.”
Investment Professionals is currently examining Galvin’s complaint. The Massachusetts regulator is seeking restitution for customers, as well as disgorgement of commissions and fees that were paid to the Texas-based brokerage firm.
t was just last month that Secretary Galvin filed charges against Morgan Stanley (MS), accusing the broker-dealer of running high-pressure sales contests to make the firm more money. Galvin accused some of the firm’s financial advisers of suggesting that some of their clients borrow against their brokerage funds and take on debt. Such advice violates their fiduciary duty to their customers. Morgan Stanley is disputing the charges.
Our Texas securities lawyers represent investors in the state and throughout the US in seeking to recover their elder financial fraud losses. Contact Shepherd Smith Edwards and Kantas, LTD LLP today. We also handle Texas securities fraud claims alleging inadequate supervision, variable annuity fraud, and other types of fraud, negligence, and misconduct.
Morgan Stanley Charged by Massachusetts for Running Allegedly Unethical Sales Contests, Stockbroker Fraud Blog, October 3, 2016