TAG | FINRA fines AXA
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AXA Advisors, LLC, without admitting or denying the findings, prior to a regulatory hearing and without an adjudication of any issue, submitted a Letter of Acceptance, Waiver and Consent (“AWC”), to the Financial Industry Regulatory Authority (FINRA)which FINRA accepted. AXA Advisors, LLC, Respondent (AWC 2009020149901, March 13, 2012).
AXA Advisors, LLC employs aproximately 5,800 registered representatives at 1,300 branch offices; the firm is a subsidiary of AXA Financial, Inc. (a member of AXA Group). AXA is a general securities business, primarily engaged in the distribution of mutual funds, variable life insurance and variable annuity contracts. AXA has no prior relevant disciplinary history.
Registered Representative, Kenneth Neely, began in the securities industry in 1987, and was affiliated with several FINRA member firms. According to FINRA’s allegations, when Neely became associated with AXA in August 2007, he had been the subject of four customer complaints, including three arbitrations, concerning his business practices at prior employers. AXA was aware that he was experiencing financial difficulties. The AWC alleges that in 2001, while employed at UBS, Neely began a Ponzi scheme, which he continued during his employ with Stifel and then at AXA, where he persuaded customers to participate in a fictitious “St. Louis Investment Club” and to invest in an equally fictitious real estate investment trust, the “St. Charles REIT.” Following his July 2009 termination by AXA for admittedly commingling and converting funds, FINRA entered into an AWC with Neely (AWC/20080157230901 /July 23,2009) and Neely was barred from the industry.
FINRA concluded that AXA’s response to the red flags raised by Neely’s ‘spreadsheet,’ his explanations, and his background, constituted a failure to reasonably supervise him and a further failure to investigate adequately the various indications concerning his misconduct, in violation of NASD Rules 2010 and 2110.
FINRA imposed upon AXA the sanctions of a Censure and $100,000 fine.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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