At Sonn Law Group, our experienced investment fraud lawyers are currently reviewing investor complaints against Metlife Securities (CRD#: 14251). This firm was also previously known as MSI Financial Services.
All investors should know that this brokerage firm is no longer registered to operate in the securities industry. In early 2016, Metlife Securities sold its brokerage business to MassMutual. Though, investors who were defrauded in the past can still bring claims against the firm.
If you lost money investing with Metlife Securities (MSI Financial Services), and you believe that you were the victim of any type of fraud or broker negligence, our investor protection team is interested in speaking to you about your claim.
Metlife Securities (MSI Financial Services): The History of Complaints and FINRA Sanctions
In May of 2017, FINRA investigators found that Metlife Securities unlawfully disadvantaged certain clients. Specifically, the brokerage firm improperly applied front-end sales charges on mutual fund purchases of certain customers. These customers included retirement plans and charity organizations, which have the ability to obtain sales charge waivers.
Registered brokerage firms have a legal responsibility to look out for the best financial interests of their clients. One of the best ways for investors to increase their overall return is to limit transaction fees. As such, brokerage firms should always ensure that customers are not paying unnecessary, illegitimate, or excessive commissions or transaction fees. As a result of the findings in this case, Metlife Securities was censured and ordered to pay at least $2,200,000 in restitution to the affected investors.
Negligent Misrepresentations and Omissions: Variable Annuities
In May of 2016, FINRA fined Metlife Securities $25,000,000 for negligent misrepresentation in connection with certain variable annuity transactions made by the firm. This was the largest fine that FINRA has ever issued relating to variable annuities. According to investigators, tens of thousands of Metlife Securities customers were adversely affected by the firm’s misconduct.
Metlife Securities created a scheme that made replacement variable annuities look far more beneficial to customers than the variable annuities they already held. In reality, the difference between the replacement annuities and the already held annuities was typically negligible.
However, based on the misleading information, Metlife customers were replacing their variable annuities frequently. The net effect was that the brokerage firm was raking in more commissions and fees, while customers ended up in virtually the same position. This type of conduct is completely unacceptable: it transfers customer money directly over to the brokerage firm in the form of unnecessary transaction fees and commissions.
Sale of Unregistered Promissory Notes
In April of 2014, the Pennsylvania Department of Banking and Securities announced its findings that multiple Metlife Securities representatives were unlawfully selling unregistered promissory notes within in the state. Under industry regulations, brokerage firms must make sure that their individual securities representatives are properly registered, and that those represented are selling products that are also properly registered.
In this case, Pennsylvania regulators determined that certain Metlife Securities brokers had failed to comply with state registration requirements. This conduct puts innocent investors at risk. As a result of the findings, Metlife Securities was fined $125,000 and ordered to pay more than $150,000 in financial restitution to the impacted investors.
Failure to Monitor Representatives: Private Placements
Brokers can only sell unregistered securities in very limited circumstances. Under FINRA Rule 5123 (Private Placements of Securities), individual brokers must follow a very strict set of requirements if they wish to sell unregistered securities to qualified investors.
Related to that rule, brokerage firms have a duty to supervise the professional conduct of their individual brokers. Firms must put a proper system in place to ensure that their securities representatives are not engaging in any violative conduct, including unsupervised private placements.
In August of 2013, FINRA investigators determined that two Metlife Securities brokers were participating in private placements in violation of industry rules. Additionally, investigators found that Metlife Securities had failed to adequately supervise these representatives. While individual representatives were engaged in the selling away of risky promissory notes, Metlife Securities failed to follow up on the issue when it was brought to their attention.
Essentially, the firm’s compliance department was looking away, allowing its representatives to engage in prohibited conduct. As a result of the findings, Metlife Securities was fined $125,000 and ordered to pay seven investors a collective $750,000 in financial restitution.
Broker Negligence: Breach of Fiduciary Duty
In March of 2010, a Metlife Securities investor brought a complaint before a Pittsburgh, PA-based FINRA arbitration panel. Within the legal complaint, this investor leveled several different causes of action against the brokerage firm, including:
- Breach of fiduciary duty;
- Broker negligence;
- Misrepresentation of material facts;
- Omission of material facts;
- Breach of contract;
- Violation of state and federal securities laws; and
- Negligent supervision of a securities representative.
The underlying issue at stake in this claim was the alleged unsuitable investment recommendations that were made by a Metlife Securities broker. Specifically, the broker recommended that an investor, who wanted to find low-risk, conservative growth, purchase a relatively volatile variable annuity.
The FINRA arbitration panel found that the claim had merit, finding that the investment truly was unsuitable. As a result, the panel ordered Metlife Securities to pay the investor $250,000 in financial compensation.
Speak to Our Investment Fraud Lawyers Today
Did you lose money investing with Metlife Securities or any of the company’s individual securities representatives? If so, you may be entitled to significant compensation. At Sonn Law Group, our legal team is dedicated to fighting for the rights and interests of investors. We can help you file a complaint so that you can get the financial relief you deserve.
To set up a free, fully confidential review of your legal claim, please contact our legal team today. Our primary office is located in South Florida, and we represent investors in all 50 states, and in Puerto Rico. We will only collect our legal fees if we help you recover financial compensation for your investment losses.