n November 20, 2019, NYLife Securities LLC (NEW YORK LIFE SECURITIES CORP., NEW YORK LIFE VARIABLE CONTRACTS CORPORATION, NYLIFE SECURITIES INC., NYLIFE SECURITIES LLC) CRD# 5167, was censured and fined $250,000 by the Financial Industry Regulatory Authority (FINRA) for their alleged failure to supervise sales of higher-risk mutual funds on November 20, 2019. NYLife Securities LLC will also pay restitution of approximately $76,600 to 28 clients affected, and offer rescission to the clients, who allegedly suffered losses of approximately $250,000.
According to the FINRA report, without admitting or denying the findings, NYLife Securities, consented to the sanctions and to the entry of findings that it failed to enforce their written procedures for supervising the suitability of sales of higher-risk mutual funds that were subject to significant volatility.
FINRA’s findings stated that according to those procedures, when sales resulted in client portfolios to be over concentrated in higher-risk securities, NYLife Securities’ registered representatives were required to work with clients to reallocate the portfolios, or determine how to change their risk tolerances and investment objectives to correspond with their assumption of additional risk.
However, according to the FINRA report, NYLife Securities LLC allegedly adjusted clients’ risk tolerances and investment objectives to accommodate the sales of higher-risk mutual funds without first seeking the clients’ input. These losses, according to the FINRA, totaled $1.4 million. According to FINRA, 21 clients complained and before any regulators intervened NYLife Securities paid full restitution to the clients totaling $1.4 million. Following the complaints and FINRA’s intervention, the firm made improvements to its operation.
FINRA stated that between September of 2014, through December of 2016, NYLife Securities failed to enforce their written procedures for supervising the suitability sales of higher-risk mutual funds.
Recently, Soreide Law Group filed a FINRA arbitration against NYLife Securities LLC, on behalf of their client, see the blog post below:
If you or a loved one have experienced losses due to the actions or recommendations of the broker/dealer, NYLife Securities LLC, contact Soreide Law Group and speak to an experienced securities lawyer regarding the recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group represents our clients nationwide before FINRA on a contingency fee basis.