Vernon Litigation Group Files Claim With Financial Industry Regulatory Authority (FINRA) Against Summit Brokerage Services, Inc.
NAPLES, Fla., June 13, 2017 /PRNewswire/ — The recently filed claim asserts that Summit Brokerage mistreated a disabled man from Cape Coral, Florida. The Summit Financial Advisor involved is Richard Brown, based in Ft. Myers, Florida. Brown has had three customer disputes in the last ten years and three additional customer disputes prior to that, according to FINRA records.
The Claim alleges that Summit and Brown recommended multiple high-risk, and illiquid Non-Traded Real Estate Investment Trusts, commonly referred to as Non-Traded REITs. The Claim also asserts improprieties related to Annuities. According to Chris Vernon of Vernon Litigation, the common threads between these types of REITs and Annuities, are they both typically motivate financial advisors to push them because of the high commissions. Unfortunately, these are or can become highly illiquid products, which is a dangerous thing for retirees according to Vernon. The Claim against Summit asserts, among other things, a failure to supervise Brown.
The types of REITs involved in this case are considered long term, non-conventional investments subject to the FINRA requirements that requires firms such as Summit to: (1) conduct adequate due diligence to understand the features of the product; (2) perform a reasonable-basis suitability analysis; (3) perform customer-specific suitability analysis in connection with any recommended transactions; (4) provide a balanced disclosure of both the risks and rewards associated with the particular product, especially when selling to retail investors; (5) implement appropriate internal controls; and (6) train registered persons regarding the features, risks, and suitability of these products. The Claim in this case asserts that Summit failed to conduct adequate due diligence, to perform proper suitability analyses, provide balanced disclosures, implement appropriate internal controls, and to properly train Mr. Brown to sell these high-risk, illiquid, high commission products.
Similarly, with respect to the types of annuities involved in this case, FINRA considers them to be long term investments and requires Summit and/or Summit Financial Advisors such as Brown to: (1) Discuss all relevant issues with the customer, including liquidity issues such as potential surrender charges, and IRS penalty, fees, including mortality and expense charges, administrative charges, and investment advisory fees; any applicable state and local government premium taxes and market risk; and (2) compare the information in the account application with other relevant information sources, e.g. an account information form, to check for apparent accuracy and consistency prior to approving the transaction. FINRA also requires that member firms such as Summit take steps to ensure that their Financial Advisors such as Brown have a thorough knowledge of the specifications of each variable annuity that is recommended, including the death benefit, fees and expenses, subaccount choices, special features, withdrawal privileges, and tax treatment. The Claim in this case asserts that Summit failed to follow these guidelines in connection with the annuities sold to Claimant.
ABOUT VERNON LITIGATION
Vernon Litigation Group is a financial litigation law firm with offices in Naples, Florida and Buckhead, Georgia that represents clients in courtroom litigation, arbitration, including FINRA arbitration, negotiation, and mediation throughout the United States. Our lawyers have collectively represented hundreds of investors in financial disputes in arbitration and litigation nationwide and recovered many millions of dollars from purported financial professionals and financial institutions, both large and small. Please contact us to discuss your rights if you believe a financial or investment professional has failed to act in your best interests or otherwise abused your trust with respect to insurance products or other investment products or services. For more information, visit our website or contact us by phone at 1-877-649-5394 or by e-mail at email@example.com to speak with a representative of Vernon Litigation Group.