Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer, UnionBanc Investment Services, LLC (CRD # 14455) was recently sanctioned by FINRA’s Department of Enforcement after an investigation into its failure to adequately supervise sales of variable annuities.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding UnionBanc Investment Services, LLC and variable annuities.
Registration Background for UnionBanc Investment Services, LLC
UnionBanc Investment Services, LLC has been a member of FINRA since 1984 with its main office located in Glendale, CA. The firm conducts a general securities business and provides a broad range of financial services. It has approximately 239 branch offices with approximately 406 registered representatives.
FINRA’s Allegations
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated May 5, 2021, UnionBanc Investment Services, LLC consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From at least January 2016 through December 2018, [UnionBanc Investment Services, LLC] failed to establish and maintain a reasonably designed supervisory system and written supervisory procedures to achieve compliance with applicable securities laws and regulations with respect to certain types of variable annuity transactions”;
- “The firm failed to detect that information was missing with respect to variable annuity exchanges involving living benefit riders and buffer annuities, preventing [UnionBanc Investment Services, LLC’s] reviewing principals from having a reasonable basis to approve these transactions”;
- “A living benefit rider provides principal or income guarantees to help protect the customer’s investment regardless of market performance during the accumulation phase of the annuity contract ”;
- “Between 2016 and 2018, approximately 61% of the 454 variable annuity exchanges at [UnionBanc Investment Services, LLC] involved the replacement of variable annuities that had living benefit riders”;
- “[UnionBanc Investment Services, LLC] customers received a disclosure form prior to executing a variable annuity transaction”;
- “While the disclosure form compared the death benefit value of the existing annuity and any reduction in the death benefit due to the exchange, it did not include the same information for the living benefit value”;
- “During this time period, [UnionBanc Investment Services, LLC’s] systems and procedures did not provide any mechanism to ensure that customers were informed of key features of the buffer annuity”; and
- By virtue of his it’s actions, UnionBanc Investment Services, LLC violated FINRA Rule 3110(a) and (b), regarding supervision; FINRA Rule 2330(c) and (d), regarding deferred variable annuities; as well as FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA’s Sanctions
FINRA’s May 5, 2021 AWC also indicates that as a result of UnionBanc Investment Services, LLC’s failure to supervise the sales of variable annuities, it consented to the following sanction(s):
- A censure; and
- fine in the amount of $100,000.00.
UnionBanc Investment Services, LLC Has A History of Regulatory Actions
In addition to UnionBanc Investment Services, LLC being censured and fined for its failure to adequately supervise sales of variable annuities, as described in the May 5, 2021 AWC, FINRA BrokerCheck for UnionBanc Investment Services, LLC reveals it has a prior history of regulatory actions, including but not necessarily limited to the following:
- On December 23, 2013 the firm entered into an AWC with FINRA regarding allegations it violated FINRA Rule 2010. The firm was censured and ordered to pay a fine in the amount of $51,000.00.
UnionBanc Investment Services, LLC Has A History of Customer Complaints
FINRA BrokerCheck for UnionBanc Investment Services, LLC also reveals it has a history of customer complaints and/or customer-initiated arbitrations, including but not necessarily limited to the following:
- On April 14, 2014, a customer-initiated arbitration was filed naming UnionBanc Investment Services, LLC as a respondent. The customer alleged breach of fiduciary duty, breach of written and oral contract, constructive fraud, elder abuse and failure to supervise. The customer further alleged damages in the amount of $723,103.18. On February 8, 2016, the arbitration panel issued an award in favor of the customer in the amount of $450,000.01.
If you or someone you know has or had a brokerage account with UnionBanc Investment Services, LLC and have concerns regarding losses in your investments, including variable annuities 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.
