금융상품의 위험성

FINRA(Financial Industry Regulatory Authority)는 금융감독 기관입니다. 금융업에 종사하는 모든 사람이 합법적인 절차에 의해서 일을 하고 있는지를 감독하는 기관을 말합니다. 

불법거래를 비롯한 합법적이지만 투자자에게 필요하지 않은 투자 등을 거론할 때 “어뉴어티” 투자상품이 자주 인용됩니다. 

월스트리트(WSJ, Nov. 12, 2014) 신문에 나온 기사 하나를 그대로 인용합니다. 

FINRA에서 조심해야 하는 투자 종목들을 발표하는데 그중 3종목을 열거합니다.  

·        Annuity

·        Non-trade REIT (Real Estate Investment Trust)

·        Equity Index Universal Life Insurance 

Free lunch or dinner를 제공하며 위의 상품을 팝니다. 수수료(commission)가 많다는 것, 여러분의 호주머니에서 나간다는 사실을 알아야 합니다.   11/13/2014

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How Troubled Brokers Cluster, Often Among Elderly Investors

Hot Spots From California to Florida Show High Rates of Regulatory Red Flags; ‘Plate-Licker’ Alert

By 

JEAN EAGLESHAM and

ROB BARRY

Updated Nov. 12, 2014 12:33 a.m. ET

DELRAY BEACH, Fla.—At Burt & Max’s Bar and Grille one day this summer, stockbroker Rafael Golan gave a group of elderly people a financial seminar. After his hourlong talk on topics from real estate to annuities, the free food arrived.

Dinners like this have landed him clients before. Some later lodged complaints against him, making him part of a cluster of brokers with troubled regulatory records that a Wall Street Journal analysis identified in this corner of Florida.

Among those clients were Pinny and Rebecca Slotnick, octogenarians who became Mr. Golan’s customers in 2003 after a dinner and later filed a complaint with regulators alleging he mishandled their accounts. He paid them a $125,000 settlement this year. He denies any wrongdoing in this or any other case.

A Wall Street Journal investigation, analyzing the records of about 550,000 stockbrokers, identified 16 U.S. hot spots like this one where troubled brokers tend to concentrate. Parts of New York’s Long Island and South Florida, long notorious for “boiler room” operators, made the list. But so did areas around Detroit, Las Vegas and California cities not known for problem brokers.

Within 10 miles of Mr. Golan’s office here were about 3,000 brokers. One in 17 had three or more disciplinary red flags over their careers that they are required by regulators to report—an industry measure of a troubled broker. That is three times the national average.

Mr. Golan, whose record has five such flags, is what some in the industry call a “plate-licker,” a broker who trolls for clients with dinners in a tactic Wall Street’s self-regulator has warned can involve excessive sales pressure. 

Why hold this summer’s seminar at a strip-mall restaurant? Mr. Golan answers by noting the thief of legend who, asked why he robs banks, replies: That is where the money is.

“I’m a broker,” says the 64-year-old Mr. Golan. “Where’s the money?”

To identify hot spots, the Journal analyzed 87% of the nation’s 630,000 brokers working in all 50 states, based on data from 27 states for which records were available. The records, compiled in the first half of 2014, include elements that many regulators consider to be red flags, such as regulatory actions, criminal charges, client complaints, recent bankruptcies and terminations. The red-flag tally includes unproven allegations and dropped complaints. 

Delray Beach is in Palm Beach County, which had one of the highest rates of troubled brokers in the analysis. It is a retirement haven, giving it something in common with most other hot spots: the elderly.

The rate of households headed by people 65 and older with incomes over $100,000 was 50% higher in the combined hot spots than the national average. Households with incomes in excess of $100,000 in hot spots were about 22% more likely to be headed by people 65 and older than households nationally.

And most hot spots were better off than the national norm: 13 had above-average numbers of households earning $200,000 or more.

State securities regulators generally do little to flag these hot spots or to concentrate resources on policing them.

“It would be helpful for regulators to pool their resources and focus them on the areas where they can do most good,” says Barbara Roper, director of investor protection at the Consumer Federation of America, “and these hot spots would seem to be a very high priority.”

The North American Securities Administrators Association, which represents state regulators, says it looks forward to reviewing the Journal’s analysis. If there are problem areas, it says, it is confident regulators will respond. A representative says policing brokers is “just a small part” of what state watchdogs do.

Wall Street’s self-regulator, the Financial Industry Regulatory Authority, or Finra, has offices in the hot spots the Journal identified, says Susan Axelrod, its executive vice president of regulatory operations, “which means we have dedicated significant regulatory resources in these geographic locations.”

The Journal used techniques from epidemiology designed to locate clusters of sick individuals, identifying hot spots in seven states: Florida, New York, New Jersey, Arizona, California, Nevada and Michigan. In each spot, the ratio of troubled brokers to total brokers significantly exceeded the national average. They varied in population from 749 to 8,708 total brokers.

More than 54,000 brokers in hot spots the Journal identified have generated 8,981 complaints, or about 20% of complaints in the analysis from under 10% of the brokers. It is impossible to know why hot spots form—whether troubled brokers cluster to seek out vulnerable investors or if characteristics of the areas, such as high numbers of well-off seniors, lead to more complaints.

Not all hot spots are well-off. Michigan has a cluster of troubled brokers in the Detroit metropolitan region. In the 14 years he worked in Troy, Mich., broker Lloyd Mincy Jr. generated 16 red flags, including four customer complaints settled for a total of $339,382 and two pending complaints alleging damages totaling $2 million, his record shows. Eight complaints were rejected or withdrawn.

Mr. Golan gives seminars, like the ones advertised here, offering free dinners to prospective clients. 

The complaints alleged he induced the investors, who were close to retirement, to invest in an annuity for which he made misleading claims, says D. Daxton White, a lawyer for several of Mr. Mincy’s former clients. Mr. Mincy agreed to be fined $20,000 and suspended for nine months in 2012 by Finra in relation to his sales of annuities, without admitting the findings.

Mr. Mincy died last year at age 48. His former employer, Centaurus Financial Inc., didn’t respond to inquiries.

A spokeswoman for the Michigan Department of Licensing and Regulatory Affairs says a third of its officials who examine firms work solely in the metro-Detroit area. Michigan took enforcement actions against seven registered brokers last year.

Wealthy, elderly enclaves were typical of hot spots. In all but three, households headed by people 65 and over were a greater share of high-income households than the national average.

A Florida Office of Financial Regulation spokeswoman says it is aware the state, which has five hot spots, includes a high rate of seniors. The watchdog “serves as the first line of defense, keeping bad actors out of the securities arena” and continuously evaluates broker disclosures, she says. Florida took actions against 25 registered brokers last year.

Arizona’s two hot spots sprawled from Phoenix’s edges into Peoria and Glendale to the West, and Scottsdale to the east. A spokeswoman for the Arizona Corporation Commission says that it has an “aggressive, comprehensive” enforcement program and that red flags are only one tool it uses. Arizona didn’t take any enforcement actions against registered brokers last year.

Another hot spot, in Long Island, was just down the road from the setting for “The Wolf of Wall Street,” the movie based on a brokerage firm in Lake Success.

In nearby Roslyn Heights, Mitchell Kurtz has faced several customer claims. His former employer, Raymond James Financial Inc., paid $1.1 million in 2010 to settle a claim against him that included allegations of churning and unauthorized trades, according to his regulatory filing. Mr. Kurtz said on his filing that the firm chose to settle the complaint and that he wasn’t asked to pay toward it. 

Two other complaints, resulting in payouts totaling $435,000, relate to advice he gave before joining Raymond James. Finra in 2012 fined him $10,000 and suspended him for 45 days for allegedly changing customer information on account forms while at Raymond James.

Mr. Kurtz, 59, in his regulatory filing, didn’t admit wrongdoing, saying that he made the changes to correct errors and that no fraud was involved. He declined to comment, as did Raymond James, which filings show fired him in 2009.

The enclave where Mr. Kurtz still works is one of three New York hot spots, along with the southern tip of Manhattan and Staten Island. Responsible for policing them is state Attorney General Eric Schneiderman, who oversees about 95,000 brokers working in the state—the highest for any state regulator—including 11,000 in hot spots, according to the Journal’s analysis.

The $5,500 in sanctions New York imposed on individual brokers last year is under 1% of the national total, although about 15% of the nation’s registered brokers work in the state, the Journal analysis showed.

Mr. Schneiderman has “brought some of the largest financial cases in American history,” a spokesman says, but adds New York’s securities law “does not provide the attorney general with review procedures or the authority to regularly examine” brokerage firms, unlike Finra or many other states.

Across the water in New Jersey is a hot spot in Monmouth and Middlesex counties. A New Jersey Bureau of Securities spokesman says the regulator disagrees that the spot has a high problem-broker rate, saying advisers with three or more disclosures aren’t necessarily troubled. Last year, the state took enforcement actions against three registered brokers.

Some hot-spot brokers have a broad investor base. Michelle Kern, 36, worked for Ameriprise Financial Inc. in Roseville, Calif., part of a Sacramento hot spot. California prosecutors alleged last year she stole a total of up to $700,000 from clients who regulatory records show were aged 24 to 76.

She pleaded guilty to one criminal count of fraud, and a federal judge sentenced her to 46 months in prison. Ameriprise says it fired her and repaid customers’ losses. A lawyer for Ms. Kern declines to comment.

Brokers at the nation’s five biggest firms are more than twice as likely to be troubled if they work in a hot spot than elsewhere, the Journal analysis showed.

The regulatory filings of Robert Klein, 54, a J.P. Morgan Chase & Co. broker in Newport Beach, Calif., show that three complaints involving him have been settled for a total of $575,000 and two have been rejected. Mr. Klein, who said in filings about those complaints that his investment strategy was appropriate, didn’t respond to inquiries. J.P. Morgan declines to comment.

He also faces five customer complaints outstanding, filed with Finra, alleging mismanagement of investment accounts and claiming damages totaling over $5.35 million, his record shows.

The hot spot where Mr. Klein works, in Orange County, is one of four in California along with the San Fernando Valley area, Northern San Diego and Sacramento. California regulators acted against one registered broker last year. A California Department of Business Oversight spokesman says: “We maintain a robust enforcement posture.”

A hot spot in Las Vegas includes its southwestern neighborhoods and portions of Henderson. Nevada’s securities administrator says the Journal’s analysis overlooks the fact that over a third of red flags brokers in the state report are for advisers’ bankruptcies or other financial difficulties. Nevada took enforcement action against one registered broker last year.

Some states without hot spots haven’t taken much action, either. Twenty of them last year took no actions against registered brokers, the analysis found.

One tactic seen in hot spots has raised regulators’ concerns: “plate-licker” seminars to woo customers. A September Finra alert warned that free-meal pitches can involve hardball sales tactics or problems at follow-ups.

David Lerner, 78, made false claims at seminars in Boca Raton, Fla., Great Neck, N.Y., and Uniondale, N.Y.—each in a hot spot—alleged a Finra complaint settled in 2012.

He agreed to a $250,000 fine and industry suspension. His firm agreed to pay $12 million. Neither admitted wrongdoing, and his industry suspension ended last year. He now helps with marketing and recruiting, says a spokesman for his Long Island firm, David Lerner Associates Inc. It is “insulting and offensive” to investors, the spokesman says, to suggest they would “invest their hard-earned savings for a chicken Parmesan dinner or coffee and cake.”

Mr. Golan, who gave the Delray Beach seminar, has disclosed two regulatory events and three complaints.

The Slotnicks invested their retirement funds with him, says their lawyer, who adds that they decline to comment. Mr. Golan agreed to settle their complaint of unsuitable annuity sales but says he “vigorously denies” the allegations.

Joyce and Abraham Pogoda became his clients after a 2003 dinner, court documents show. After Mr. Pogoda died in 2006, Mr. Golan sold unsuitable annuities to his “vulnerable, grieving widow,” according to a 2012 Florida regulatory action fining him $10,000.

Mr. Golan, who settled without admitting the allegations, says the regulator brought the case after “no investigating.” A spokeswoman for the regulator says his “notion is simply false.”

A state court in 2010 awarded $240,000 to Mrs. Pogoda, who died this year. Mr. Golan says the Pogodas “didn’t lose a nickel” and the jury “just made up some numbers.”

Mr. Golan says dinners attract clients. “It’s called prospecting,” he says, “just like you do for gold.”

Bulk data on the disciplinary and employment histories of the nation’s 630,000 registered stockbrokers are held by the Financial Industry Regulatory Authority, an industry-funded regulator that makes individual broker records available online. It doesn’t allow access to its data in bulk, so its system can’t be used to identify the nation’s most troubled brokers.

The Securities and Exchange Commission, which oversees Finra, has access to Finra’s data but declined to provide records, saying they must be obtained from states where brokers are registered.

Journal reporters filed public-records requests with all 50 state securities regulators, some of which said they didn’t know how to obtain the data or cited technological difficulties in producing them. Others, such as Massachusetts, declined to provide data. The Journal has appealed that state’s denial.

Journal reporters pieced together stockbroker records from 27 states detailing the disciplinary and employment histories of about 550,000, or 87%, of the country’s stockbrokers, over their careers. Many brokers were registered in multiple states. New York’s Office of the Attorney General didn’t provide 2014 data on customer complaints against brokers, so the analysis used the state’s complaints data from 2013. The other data in the analysis were compiled in the 2014 first half.

The records included elements that many regulators consider to be red flags, such as regulatory actions, criminal charges, client complaints, recent bankruptcies and terminations. The red-flag tally includes certain unproven allegations and dropped complaints.

To identify hot spots, reporters used software employed by epidemiologists called SaTScan to locate high-density clusters of sick individuals. Using a technique called the spatial scan statistic, the tool flagged 16 areas with at least 500 brokers where there was an above-average rate of troubled individuals—those with three or more red flags on their records, an industry measure of a troubled broker.

Because the Journal didn’t have access to data on every stockbroker, it is possible there are other hot spots. One state with a hot spot, Michigan, didn’t provide detailed information about brokers’ red flags. As a result, the analysis included only about 95% of individuals registered there.

“You have a clean analysis,” said Martin Kulldorff, a professor at the Harvard Medical School’s Department of Population Medicine who created some of the mathematical techniques used in the analysis, when told of the Journal’s methodology. “I feel very comfortable with what you did and you asked all the right questions.”

While there wasn’t a single demographic thread tying the hot spots together, many tended to be wealthier and more elderly than the national average. To determine whether this was an effect of high concentrations of brokers, reporters also identified several clusters of brokers with a very low number of red flags. These regions, the analysis found, weren't significantly different from the national average.

The enforcement analysis was based on data for each state’s securities regulator about enforcement actions in 2013 against brokers and firms registered with Finra when the action was resolved, but not cases against unregistered advisers, expelled firms and former brokers.

Write to Jean Eaglesham at jean.eaglesham@wsj.com and Rob Barry at rob.barry@wsj.com