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FINRA Doles Out Annuity Selling Punishment


Lesson learned for Robert Joseph Kennedy III, a financial advisor in New York.  Don’t break the rules when it comes to selling annuities, even if it seems like a minor infraction or your firm says it will be fine.  FINRA works hard to make sure that financial advisors are meeting standards and following rules when it comes to the financial industry, so just follow the rules and your business will run smoothly.  According to Bill Singer’s Forbes article, “FINRA Rejects A New York State of Mind When it Comes to New Jersey Annuity Signatures,” Kennedy settled with FINRA at the end of last month.

Since 1984, Kennedy has been a member of FINRA.  His firm, Walnut Street Securities, Inc. is also a FINRA member.  The settlement says that 6 annuities were sold by Kennedy between August and December of 2004 through Walnut Street.  While the annuities were documented as being signed in New Jersey, they were actually signed in the state of New York, where Kennedy and Walnut Street operate.  This is significant because these particular annuities were not authorized to be sold in New York state.

Because of the infraction, Kennedy will pay a $5,000 fine to FINRA, be suspended for 2 months from any FINRA related activities, and have to take his Series 7 over again within 60 days of his suspension.  This serves all advisors as a lesson to be learned.  Follow FINRA’s rules when selling annuities and do right by your clients and the industry in general.

Written by Rachel Summit

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