Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker/advisor, Michael G. DeLuca (CRD # 4428054) was recently suspended from the securities industry by FINRA’s Department of Enforcement after an investigation into his failure to supervise regarding variable annuities.

The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. DeLuca.

Michael G. DeLuca Suspended from Securities Industry by FINRA for Failure to Supervise - Variable Annuities (1)Registration Background for Michael DeLuca

Mr. DeLuca first became registered in the securities industry in 2001. FINRA BrokerCheck shows that he is currently registered with Beaver Falls, PA based Fortune Financial Services, Inc. (CRD # 42150) and investment advisory firm Prosperity Wealth Management, Inc. (CRD # 174328). His prior registrations and/or employments include Prosperity Wealth Management, Inc. (CRD # 174328) from September 2017 to December 2019, Hazard & Siegel Advisory Services LLC (CRD # 151462) from June 2010 to August 2012, and USA Financial Securities Corporation (CRD # 103857) from October 2009 to April 2010.

FINRA’s Allegations Against Michael DeLuca

According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated December 8, 2022 (No. 2020065435402), Mr. DeLuca consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:

  • While associated with Fortune, from July 2016 to July 2021, [Mr.] DeLuca failed to reasonably supervise variable annuity exchanges and surrenders recommended by Representative A because he failed to reasonably respond to red flags that many of Representative A’s exchange applications contained material misrepresentations”;
  • Between July 2016 and July 2021, Representative A engaged in a pattern of recommending that customers exchange variable annuities without considering whether such transactions were suitable in light of the substantial surrender charges that resulted from his recommendations”;
  • In connection with these recommendations, Representative A submitted new account documents and variable annuity disclosure paperwork for supervisory approval that misrepresented the customer’s surrender charges”;
  • On 84 exchange applications, Representative A falsely represented that the exchange would not result in the imposition of a surrender charge”;
  • [Mr.] DeLuca’s responsibilities included reviewing and approving variable annuity exchanges that did not disclose the imposition of a surrender charge”;
  • On numerous occasions, [Mr.] DeLuca failed to reasonably investigate red flags of material misrepresentations made by Representative A in exchange applications submitted for review”;
  • [Mr.] DeLuca also failed to compare the information on the exchange documents with other available external information sources such as the original applications, the surrender fee schedules, or the customers’ most recent account statements, and thereby failed to detect that Representative A misrepresented, on 84 exchange applications, that the customer would not have to pay a surrender charge”; and
  • By virtue of his actions, Mr. DeLuca violated FINRA Rule 3110 regarding supervision, FINRA Rule 2330 regarding deferred variable annuities, and FINRA Rule 2010 regarding standards of commercial honor and principles of trade.

FINRA Suspends Michael DeLuca from Securities Industry

As a result of such violations and in addition to the above-described findings and conclusions, FINRA’s December 6, 2022 AWC also indicates that Mr. DeLuca consented to the following sanction(s):

  • A 15 business-day suspension from association with any FINRA member in all capacities; and
  • A fine in the amount of $5,000.00.

Michael DeLuca Has A Prior History of Securities Industry Customer Complaints

In addition to Michael DeLuca being suspended by FINRA from the securities industry after an investigation into his failure to supervise regarding variable annuities, FINRA BrokerCheck for Mr. DeLuca reveals that he has a prior history of customer complaints and/or customer-initiated arbitrations, including but not necessarily limited to the following:

  • On May 12, 2006 a customer initiated a complaint against Mr. DeLuca regarding alleged actions that occurred when he was associated with USA Financial Securities. The customer alleged unsuitability with respect to an annuity. The customer further alleged damages in the amount of $33,000.00. On May 30, 2006, the complaint was closed without action.

If you or someone you know has or had a brokerage account with Michael G. DeLuca and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.