Monday, 28 July 2014
Last updated 4 hours ago
Jul 12 2013 | 12:37pm ET
The securities division of the State of Massachusetts has sent subpoenas to 15 brokerage firms as part of an investigation into sales of alternative investments to seniors.
The investigation targets Morgan Stanley, Merrill Lynch, UBS Securities, Fidelity Brokerage Services, Charles Schwab & Co., Wells Fargo Advisors, TD Ameritrade, ING Financial Partners, LPL Financial, Commonwealth Financial Network, MML Investor Services, Investors Capital Corp., Signator Investors, Meyers Associates and WFG Investments.
The subpoenas ask the brokerages to provide information on sales of alternative investments—including hedge funds, oil and gas partnerships, private placements and structured products—to state residents aged 65 or over. Firms were also asked for material related to supervision, compliance and training in the sale of the products to retail investors.
Secretary of the Commonwealth William F. Galvin began the investigation on Wednesday, based on the findings of an investigation into sales of REITs to seniors which resulted in five broker dealers paying $975,000 in fines and $8.6 million in restitution earlier this year.
In a Wednesday statement, Galvin said that alternative products, while “not unsuitable in and of themselves” are “accidents waiting to happen.”
The probe doesn't indicate wrongdoing, he said. The brokerages have until July 24 to respond.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…