United States:
FINRA Settles Cases Stemming From Targeted Exams On UIT Early Rollovers
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FINRA reached a settlement with six member
firms for “failures to reasonably supervise early rollovers of
Unit Investment Trusts (“UIT”), which caused customers to
incur potentially excessive sales charges.” The settlements
were the result of a targeted examination of UIT early
rollovers.
In a press release on the success of the targeted examinations
(or “sweep”), FINRA stated that “a registered
representative who recommends that a customer sell his or her UIT
position before the maturity date and then ‘roll over’
those funds into a new UIT causes the customer to incur greater
sales charges than if the customer had held the UIT until maturity,
raising suitability concerns.”
As a result of FINRA’s review, the various firms that are
part of the settlement have agreed to pay an aggregate of $16.8
million in restitution to approximately 10,000 investors, as well
as an additional $6.6 million in fines.
Primary Sources
- FINRA Announces Final Results of Targeted
Examination of Unit Investment Trust Early
Rollovers - Targeted Examination Letter on Unit Investment
Trust Rollover Review
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