FINRA Takes Action Against Former Cambridge Advisor for Annuity Exchange Violations
From the desk of Jim Eccleston at Eccleston Law
Malay Kumar, a former advisor affiliated with Cambridge Investment Research, recently agreed to settle a disciplinary matter brought by FINRA. The AWC (Acceptance, Waiver, and Consent) reflects a $10,000 fine and a 12-month suspension. The settlement revealed that Kumar recommended a series of variable annuity exchanges that violated Reg BI.
According to the settlement terms, Kumar agreed to pay $50,103 in restitution to seven customers. These customers incurred unnecessary surrender fees due to Kumar's recommendations between June 2018 and October 2021. As reported by AdvisorHub, Kumar encouraged clients to surrender existing variable annuities and reinvest the proceeds into new annuities without adequately considering the substantial surrender fees and the potential loss of benefits and liquidity.
The AWC outlined multiple regulatory violations by Kumar. In addition to violating Regulation Best Interest, he also breached its predecessor suitability requirement. Furthermore, FINRA imposed a violation of its books-and-records rule, as Kumar falsely indicated on 18 annuity purchase forms that they were not part of an exchange or purchased with proceeds from an earlier sale. Additionally, Kumar was found to violate Rule 2010, which requires members to uphold "high standards" of conduct.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra