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- Following failures in monitoring, the company failed to prevent several clients from being charged excessive and unnecessary fees, according to FINRA.
- One of its brokers had engaged in inappropriate mutual fund and cross-product transfers, according to FINRA.
- The firm agreed to pay a fine of $ 200,000 and $ 63,347 in additional restitution to clients to settle the allegations.
NYLife Securities has agreed to pay a total of $ 263,347 to settle allegations that, due to oversight failures, it failed to prevent several of its clients from being charged excessive and unnecessary fees after a of its brokers has engaged in inappropriate mutual funds and is switching products, the Financial Industry Regulatory Authority said.
From January 2015 to March 2019, the company “failed to establish, maintain and apply a monitoring system, including written monitoring procedures, reasonably designed to comply with FINRA Rule 2111 suitability requirements with respect to mutual fund and cross product transfers, ”according to FINRA.
Without admitting or denying the findings of the industry self-regulator, NYLife Securities signed a Letter of acceptance, waiver and consent from FINRA on September 30 in which he agreed to be censored and pay a fine of $ 200,000 and restitution of $ 63,347. FINRA signed the letter on Monday.
NYLife Securities has also agreed to review and update its Field Supervision Guide for Managing Partners and the Training Module for Managing Partners and their Delegates, regarding Mutual Fund Supervision and Cross-Product Changes. the society.
“Within 120 days at the latest from the date of notice of acceptance from AWC, a senior executive and director of NYLIFE Securities must certify in writing to FINRA that the company has updated the guide and training module to address inappropriate short-term issues. mutual fund trading and cross product switching, with training to begin after the 120 day period, ”according to the AWC letter.
The company has “always acted in good faith and remains fully committed to providing the right tools and advice to meet financial needs,” Kevin B. Maher, spokesperson for parent company New York Life, told ThinkAdvisor on Tuesday. “We were able to work with FINRA to find a solution that best serves the interests of our clients,” he added.
“Broker A” cashed
“On hundreds of occasions” between January 2015 and March 2019, a firm’s broker, identified only as “broker A,” recommended 10 clients to buy and sell Class A mutual funds after having held the shares for short periods, according to the AWC letter.