Park Avenue Securites Censured and Fined $300K by FINRA

Soreide Law Group obtained the following information on FINRA’s website under, “Disciplinary and Other FINRA Actions, June 2018.”  Soreide Law Group has handled past cases against Park Avenue Securites.
Park Avenue Securities LLC (CRD #46173, New York, New York)
was censured, fined $300,000 and required to submit a written certification to FINRA that it has completed a review of its systems and procedures regarding the supervision of variable annuities and that, as of the date of the certification, the firm’s policies, systems and procedures (written and otherwise) are reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules, including the FINRA rules addressed in the AWC.
Without admitting or denying the findings, Park Avenue Securities consented to the sanctions and to the entry of findings that it failed to establish, maintain and enforce a supervisory system and WSPs (Written Supervisory Procedures) reasonably designed to ensure that representatives’ recommendations concerning multi-share class variable annuities complied with applicable securities laws, regulations and rules.
FINRA’s findings stated that the Park Avenue Securities’ sales of variable annuities included L-share contracts. Nevertheless, the firm’s WSPs failed to address suitability considerations for sales of different variable annuity share classes.
According to FINRA, Park Avenue Securities did not provide training to registered representatives on the features of the various share classes and the associated fees and surrender charges, and did not provide them with adequate information to compare share classes to make suitability determinations.
Also, according to FINRA, the firm had no WSPs, and failed to provide guidance or training to registered representatives and principals regarding the sale of long-term income riders with multi-share class variable annuities, particularly the combination of L-share contracts with long-term income riders. Park Avenue Securities had no surveillance procedures to determine if any of its representatives had potentially inappropriate rates of variable annuity exchanges. The firm provided additional training to its registered representatives regarding multi-share class variable annuities, including L-share contracts. Subsequently, the firm’s representatives sold fewer L-share contracts, and it ceased selling L-share contracts.
(FINRA Case #2015043390301)
According to InvestmentNews, the following information was written on L-share contracts: “Investors pay more for the liquidity of L-share variable annuities, which often have three-to-four-year surrender periods. They carry fees roughly 0.35% to 0.50% higher than B shares, the most popular type of VA, which carry longer surrender periods, typically seven years. However, regulators (such as FINRA) have questioned why investors would pay higher fees for an L-share annuity that carries a guaranteed-income feature, an inherently long-term rather than short-term play because it offers a lifelong income stream. In these cases, investors don't need more liquidity.”
If you experienced losses due to the actions or recommendations of Park Avenue Securities, contact Soreide Law Group and speak to a securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at:  888-760-6552.
Soreide Law Group represents clients nationwide before FINRA and we operate on a contingency fee basis—no fee if no recovery.  Let our years of experience work for you.
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