MML Investors Services has reached a settlement with the Financial Industry Regulatory Authority for a second time over violations involving 529 savings plans, according to a report by Financial Advisor.
The firm initially paid $1.8 million in 2016 after FINRA said MML failed to reasonably supervise registered representatives’ guidance to customers regarding the suitability of the 529 plans.
According to FINRA, “the firm’s procedures did not specifically address the relationship between account beneficiary age, the number of years until funds would be needed to pay qualified higher education expenses, and 529 plan share-class suitability.” This was reported to have been a violation of MSRB Rules G-27(a), (b) and (c).
Then, from July 2016 to October 2019, the MML supervisory system did not identify certain customer contributions to mutual funds and 529 plans and determine whether those customers were eligible for breakpoint discounts for sales charges. In this instance, MML was found to have violated FINRA Rules 3110(a) and 2010 and MSRB Rules G-27(a) and (b). As part of the latest Acceptance, Waiver and Consent letter, the firm was censured and agreed to pay an additional $744,200 in restitution and estimated interest, but did not have to pay a fine. FINRA’s Department of Enforcement credited MML for what it called “extraordinary cooperation.”
Both violations were uncovered after MML took part in voluntary FINRA initiatives in which firms review their own supervisory systems and procedures.
MML issued a statement saying it was pleased to resolve the matter and put it behind them.
The attorneys at Lewitas Hyman fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. We have decades of experience representing clients with respect to examinations, investigations and enforcement proceedings initiated by the SEC, FINRA, state securities regulatory agencies and other self-regulatory organizations. If your firm is facing an investigation from a regulatory agency, please contact us at (888) 655 6002 or through our online contact form.