The Financial Industry Regulatory Authority has fined a former rep with New York Life $5,000 and suspended her for 16 months for paying life insurance premiums for several clients using her personal bank account.
According to FINRA's order, between Jan. 1, 2022, and Dec. 2, 2022, while working both as an insurance agent for New York Life Insurance Co. and a registered rep for NYLife Securities, the company's brokerage arm, Katelyn Rae Cordido Reese "falsified documents by placing her personal bank account information on life insurance applications for non-family-member customers."
In 95 instances, the order states, Reese made premium payments for these customers using funds from her personal bank account, in violation of both NYLife and New York Life Insurance policies.
"In turn, these premium payments caused New York Life Insurance to pay Reese advanced sales commissions, which exceeded the value of the premium payments," violating FINRA Rule 2010, the order states.
The order continues: "Reese submitted multiple life insurance applications that contained accurate customer information, except that Reese input her personal checking account number rather than the customer's account number on the electronic funds transfer form, creating the false appearance that Reese's own bank account number was the customer's bank account number."
As a result, in the 95 instances, Reese paid a total of $30,367 in life insurance premiums for non-family-member customers.
