SagePoint Financial Fined Over $1 Million

SagePoint Financial has been ordered by the Financial Industry Regulatory Authority (FINRA) to pay over $1,000,000 in restitution to their clients involved in early rollovers of unit investment trusts (UITs). A unit investment trust (UIT) is an investment that offers a fixed portfolio, generally of stocks and bonds, as redeemable units to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income. Typically, a UIT is sold to investors as a unit, fixed or closed portfolio of securities that are designed to terminate on a specific date of maturity, usually within one to two years.
On June 10, 2020, without admitting or denying FINRA’s findings, SagePoint Financial consented to the sanctions and to the entry of findings that it failed to establish and maintain and enforce Written Supervisory Procedures (WSPs) that were reasonably designed to supervise the suitability of representatives’ recommendations to clients for early rollovers of unit investment trusts (UITs).
FINRA’s findings stated in part that the firm’s WSPs did not discuss early rollovers or series-to-series early rollovers or otherwise provide guidance to its supervisors about how to monitor for potentially unsuitable patterns of early rollovers or series-to-series early rollovers.
According to the FINRA report, SagePoint Financial’s review of UIT transactions through its order entry system was not focused on suitability concerns related to early UIT rollovers. As a result, the firm did not identify that firm representatives recommended potentially unsuitable early rollovers which caused the clients to incur $1,315,373.01 in sales charges that they would not have incurred had they held the units until their maturity dates..
According to FINRA’s BrokerCheck, Sagepoint Financial, Inc. has 25 disclosures, 14 of them are regulatory.
SagePoint Financial is one of several broker/dealers within the Advisor Group, which also include, FSC Securities, Royal Alliance Associates, and Woodbury Financial Services. The Advisor Group’s network has approximately 7,000 investment advisors nationally. The Advisor group recently merged with Ladenburg Thalmann Financial Services, adding another 4,500 financial professionals registered nationwide.  Those companies include Securities America, Triad Advisors, Securities Service Network, Investacorp, and KMS Financial Services. SagePoint Financial has over 800 branches with 1,800 investment advisors.
Investors may have suffered losses from these investments due to the lack of liquidity and often high fees associated with these UITs.  However, it has not stopped broker/dealers from recommending them to their clients. These types of investments may not be suitable for low to moderate risk portfolios.  It is the responsibility of the broker/dealers to inform their clients of all possible risks associated with these illiquid and high risk investments.
If you’ve suffered investment losses due to the actions or recommendations of Sagepoint Financial, particularly in the sale of UITs, contact Soreide Law Group and speak to an experienced securities lawyer regarding the possible recovery of your financial losses through a FINRA arbitration at:  888-760-6552.
Soreide Law Group works on a contingency fee and represents our clients nationwide before FINRA.