A subsidiary of MassMutual has been fined for failing to supervise an agent who defrauded clients, according to Investment News.
The fine of $250,000 was levied by the Massachusetts Securities Division as a part of a consent order reached with the company, MLS Investment Services.
The agent, Charles J. Evan, allegedly pressured clients into purchasing unsuitable high-commission insurance products while claiming falsely that he was not receiving commissions on those sales. State regulators said MLS Investment Service’s supervisory procedures failed to ensure that Evan accurately disclosed his compensation for providing investment advice.
MLS did not admit or deny the findings but agreed to pay the fine and also disgorge any profits that were related to Evan’s unlawful actions. The company also consented to conduct an internal review of its supervisory procedures.
Evans was terminated by MLS and barred by the Financial Industry Regulatory Authority. The state securities division has also filed a separate complaint that seeks to permanently ban him from operating in Massachusetts. In addition, regulators will try to have Evan ordered to pay restitution to investors who were affected as well as paying an administrative fine.
In its complaint, the securities division said “Evan perpetrated a deceptively simple scheme for almost 10 years by subjecting his clients to high-pressure boiler room sales tactics and outright fraudulent misstatements, misrepresentations, and omissions while advising those clients to purchase high commission products intended solely to generate large profits for himself.”
Investigators said Evan pressured clients to act quickly on purchases by falsely telling them his products were only available for a short time as “special deals.”
The attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
