FINRA Imposes VA Sales Fine

In addition, Fifth Third Securities must hire an independent consultant to review its system and procedures for overseeing VA transactions as well as its training for personnel engaged in VA sales, FINRA says.

FINRA found that between January 2004 and December 2006, Fifth Third Securities made 250 unsuitable VA exchanges or transactions through 42 brokers:

Many of the brokers worked in Fifth Third Bank branches, FINRA says.

FINRA says the bank gave the brokers lists of customers with maturing certificates of deposit and referrals from bank employees to identify potential new VA customers.

Some of the prospects were elderly or unsophisticated and had conservative investment objectives, FINRA says.

One broker had 74 customers enter into 118 unsuitable exchanges shortly after he joined Fifth Third Securities in early 2005, according to FINRA. The broker switched many of his customers into new VA contracts, with all of the contracts being issued by the same insurer and having the same riders, FINRA says.

Other brokers had bank customers use cash from CDs or bank accounts to buy the same VA and had the customers put their entire investments into the fixed-rate VA sub-account, according to FINRA.