AXA Advisors LLC (AXA Advisors), a subsidiary of AXA Financial Inc., is an independent broker-dealer headquartered in New York City and reportedly has over 5000 registered representatives across the United States operating in one or two person offices. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors from churning and unsuitable investments and unsuitable investment strategies!
Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors under common law. Churning can occur if an AXA Advisors broker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his benefit, i.e., commissions not yours! These trades rarely, if ever, make the investor any money. In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.
In every broker-investor relationship, the broker must assess what the investor's goals are as well as his or her risk tolerance. This assessment is based on a number of key factors, including the investor's stated objectives, risk tolerance, financial condition and tax status. It is the broker's responsibility to only pursue investments suitable for that investor based on these factors. A stockbroker is obligated to only recommend suitable investments and investment strategies. If an AXA Advisors broker recommends unsuitable investments and unsuitable investment strategies, it can leave you vulnerable to unnecessary risk and losses.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.
There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to excessive purchases and sales of securities and securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. Generally, no manager is onsite to detect the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your AXA Advisors brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against AXA Advisors stockbrokers who engaged in churning, recommended unsuitable investments and unsuitable investment strategies that caused investors losses.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Showing posts with label AXA Advisors. Show all posts
Showing posts with label AXA Advisors. Show all posts
Friday, August 30, 2013
Wednesday, March 6, 2013
AXA ADVISORS INVESTOR ALERT - INDEPENDENT BROKER-DEALER'S LAX SUPERVISION CAUSES LOSSES
AXA Advisors LLC (AXA Advisors) is a subsidiary of the AXA Financial Inc. with its headquarters located in New York City. It is one of the largest independent broker-dealers whose business model is akin to a franchise operation. AXA Advisors reportedly has over 5000 registered representatives across the United States operating in one or two person offices. Its growth in recent years can largely be attributed to layoffs at the major wire houses due to the most recent financial market meltdown. Most of AXA Advisors registered representatives' gross production of revenues is less than $300,000 per year. Its branch offices are largely comprised of small producers earning commissions at higher pay out rates than the major full-service brokerage firms, a recipe for disaster when it comes to protecting investors' rights.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. No one is onsite to detect forgeries of clients' signatures on documents, the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your AXA Advisors brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against AXA Advisors stockbrokers who engaged in stock brokerage misconduct and caused investors losses.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors' rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor's compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
There is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. No one is onsite to detect forgeries of clients' signatures on documents, the placement of inaccurate information about a client's investment objectives and financial condition to document the suitability of a particular investment recommendation. There is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, there may be only one compliance audit visit per year at many of these offices. These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms.
Have you suffered losses in your AXA Advisors brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against AXA Advisors stockbrokers who engaged in stock brokerage misconduct and caused investors losses.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Tuesday, January 1, 2013
DON'T TRADE IN YOUR VARIABLE ANNUITY WITHOUT GETTING BACK ALL OF THE EXCESSIVE FEES!
More and more insurers are offering annuity contract buyouts to owners of Variable Annuity ("VA") contracts with a guaranteed-minimum-withdrawal benefit ("GMWB"). It seems that some insurers recognize an opportunity to retain all of the excessive fees they received from legacy VA clients and coax them out of VA contracts with GMWB features and death benefits within offer of a slightly higher account value. You remember the broker's pitch for the purchase of these VA contracts: "if the value goes down, you are guaranteed income for life"; and "every year the amount of the death benefit increases for your beneficiaries."
Why the change of heart? Well it's because many of the insurers recognize: we're in an extended period of low interest rates, and it's difficult for them to invest and make money; their VA contracts are underwater because the mutual fund sub-accounts performed poorly; and many VA contract owners can't or won't do the math! The insurers at Hartford Financial Services Group, Inc., AXA Equitable Life Ins. Co., Transamerica Life Insurance Co. and Wells Fargo want you to give up your GMWB benefit in exchange for a slightly higher account value with no more guarantees. The only beneficiaries of this exchange will be the brokers who retained all of the excessive upfront commissions and generous trailing commissions and the insurers who will duck out of VA contracts with product features that have now become unprofitable for them.
An annuity is a form of insurance that offers a series of payments for a period of time. VAs are typically higher in risk when compared to other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most VAs do not have principal protection, so investors can lose money if markets deteriorate. GMWB gives the VA policy owner the ability to protect their retirement investments against downside market risk by allowing the owner to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
Neither the broker nor the insurer looked out for your interest when they sold you this overpriced and unsuitable VA product and they certainly are not looking out for your interest today with the exchange offer. Make sure you consider the excessive fees you paid for the benefits they want to take back as well as the likelihood of future account losses that will no longer be protected in making your decision.
Have you suffered losses resulting from trading in your guaranteed-minimum-withdrawal benefit variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Why the change of heart? Well it's because many of the insurers recognize: we're in an extended period of low interest rates, and it's difficult for them to invest and make money; their VA contracts are underwater because the mutual fund sub-accounts performed poorly; and many VA contract owners can't or won't do the math! The insurers at Hartford Financial Services Group, Inc., AXA Equitable Life Ins. Co., Transamerica Life Insurance Co. and Wells Fargo want you to give up your GMWB benefit in exchange for a slightly higher account value with no more guarantees. The only beneficiaries of this exchange will be the brokers who retained all of the excessive upfront commissions and generous trailing commissions and the insurers who will duck out of VA contracts with product features that have now become unprofitable for them.
An annuity is a form of insurance that offers a series of payments for a period of time. VAs are typically higher in risk when compared to other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most VAs do not have principal protection, so investors can lose money if markets deteriorate. GMWB gives the VA policy owner the ability to protect their retirement investments against downside market risk by allowing the owner to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
Neither the broker nor the insurer looked out for your interest when they sold you this overpriced and unsuitable VA product and they certainly are not looking out for your interest today with the exchange offer. Make sure you consider the excessive fees you paid for the benefits they want to take back as well as the likelihood of future account losses that will no longer be protected in making your decision.
Have you suffered losses resulting from trading in your guaranteed-minimum-withdrawal benefit variable annuity? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Tuesday, November 27, 2012
AXA ADVISORS FINED $100,000.00 FOR NOT FIRING BROKER WHO RAN A MISSOURI PONZI SCHEME
AXA Advisors has been fined $100,000.00 by the Financial Industry Regulatory Authority (FINRA) for not investigating and firing a broker who was running a Ponzi scheme, which dates back to 2001. Kenneth Neely began to work with AXA Advisors in Clayton, Missouri in 2007 before FINRA permanently barred him from the financial industry in 2009. Mr. Neely's Ponzi scheme defrauded investors out of $600,000.00 who for the most part belonged to a church and were led to believe they were investing in a real estate investment trust. Be that as it may, AXA was aware of Mr. Neely's fraudulent activity in 2008 when AXA conducted a yearly audit of him, which revealed a spreadsheet with investor payout information. Mr. Neely falsely claimed that the figures were for a client who wanted to start and budget a business. Mr. Neely eventually pled guilty to mail fraud and converting and commingling funds. Mr. Neely was fired by AXA Advisors in 2009.
A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. According to FINRA, Mr. Neely used his investors' money to pay earlier investors while generating sham invoices, which represented ownership certificates.
Selling away is the inappropriate practice of an investment professional that sells or solicits securities or investments not held or approved by the brokerage firm with which the professional is associated with. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales. AXA Advisors can be held liable for Mr. Neely's activities because it either failed to establish a reasonable supervisory system, or because it failed to implement an existing reasonable supervisory system. Even if AXA Advisors did not know of Mr. Neely's activities, it can still be liable to investors for damages for not investigating into Mr. Neely's computer records, lies, and questionable history.
Have you suffered investment losses in Kenneth Neely's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. According to FINRA, Mr. Neely used his investors' money to pay earlier investors while generating sham invoices, which represented ownership certificates.
Selling away is the inappropriate practice of an investment professional that sells or solicits securities or investments not held or approved by the brokerage firm with which the professional is associated with. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales. AXA Advisors can be held liable for Mr. Neely's activities because it either failed to establish a reasonable supervisory system, or because it failed to implement an existing reasonable supervisory system. Even if AXA Advisors did not know of Mr. Neely's activities, it can still be liable to investors for damages for not investigating into Mr. Neely's computer records, lies, and questionable history.
Have you suffered investment losses in Kenneth Neely's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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