The Financial Industry Regulatory Authority separately fined cfd Investments Inc. and Hennion & Walsh Inc. due to various violations, according to its March 2019 report.
Cfd Investments on Jan. 10 was censured and fined $125,000 for failing to maintain and enforce a supervisory system designed to ensure representatives' variable annuities recommendations were in compliance with FINRA rules. FINRA found cfd Investments failed to address suitability issues on fees and costs or surrender periods of variable annuity share classes and also failed to sufficiently supervise rates of variable annuity exchanges.
Hennion & Walsh on Jan. 23 was censured and fined $165,000 and ordered to pay $305,438.83 in restitution to customers. The company must also certify to FINRA that its policies and internal controls are in full compliance with regulations. The regulatory authority found that the company's brokers did not fully assess whether alleged benefits to customers from recommended series-to-series switches of proprietary unit investment trusts outweighed the additional sales charges incurred. As a result, customers had to pay unnecessary sales charges worth $305,438.83.
Cfd Investments and Hennion & Walsh consented to the sanctions imposed and neither admitted nor denied FINRA's findings.