The Financial Industry Regulatory Authority imposed sanctions on Logan Group Securities over violations involving Regulation Best Interest, Form CRS, and annuity purchases, according to Think Advisor.
FINRA’s letter of acceptance, waiver and consent stated that the Logan Group was censured, fined $70,000, and required to certify that it has implemented a supervisory system reasonably designed to remediate the issues identified by regulators.
“From June 30, 2020, through the present, The Logan Group failed to establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI, and failed to establish a supervisory system, including WSPs, reasonably designed to achieve compliance with Reg BI and applicable FINRA rules,” FINRA stated in its AWC letter. “From June 30, 2020, to August 2021, the firm had no written policies and procedures, including WSPs, addressing Reg BI. Between August 2021 and November 2021, the firm’s Reg BI WSPs provided only general information regarding the purpose of Reg BI and did not describe how to prevent, detect, or promptly correct violations of Reg BI or to otherwise achieve compliance with Reg BI.”
The authority noted that FINRA Rule 3110 requires member firms to establish, maintain, and enforce a supervisory system, including written procedures, to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws, regulations, and FINRA rules.
Violations of Reg BI or FINRA Rule 3110 also are violations of FINRA Rule 2010, requiring high standards of commercial honor and just and equitable principles of trade in the conduct of business.
FINRA also found that the Logan Group violated Form CRS requirements and failed to establish and maintain a supervisory system reasonably designed to comply with Form CRS.
Form CRS provides customers with information about the types of services the firm offers; the fees, costs, conflicts of interest, and required standard of conduct associated with those services; whether the firm and its investment professionals have reportable
legal or disciplinary history; and how to get more information about the firm.
In addition, it was determined that The Logan Group failed to reasonably supervise recommendations of deferred variable annuity purchases and exchanges.
“The firm failed to consistently and accurately inform the customers to whom it recommended purchases and exchanges of variable annuities about various features,” FINRA stated. “For example, from March 2021 to present, the firm did not utilize the Client Account Form to document disclosure and suitability determinations for approximately a third of the variable annuity purchase and exchange recommendations made by the firm.”
Even for transactions where the form was used, the form lacked information about various deferred variable annuity features, and the firm often failed to otherwise disclose such features, regulators said. As a result, the firm lacked a reasonable basis to believe that all of its customers were informed of such features, as required by Rule 2330(b)(1)(A)(i).
Under that rule, no firm shall recommend to any customer the purchase or exchange of a deferred variable annuity unless the firm has a reasonable basis to believe that, among other things, the customer has been informed of “various features of deferred variable annuities”.
The Logan Group accepted and consented to FINRA’s findings without admitting or denying them: As part of its determination of sanctions, FINRA said it considered that in May 2026, The Logan Group engaged a consultant who is in the process of reviewing the adequacy of the firm’s WSPs and supervisory system for compliance with Reg BI and FINRA Rule 2330. The consultant will submit a report at the conclusion of his review containing his recommendations. As such, FINRA is not recommending an
independent consultant as a sanction.
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