Regulators In Illinois Shut Down Firm For Preying On Elderly
Illinois Securities regulators have nailed a husband and wife team that preyed on the elderly, getting them to partially surrender variable annuities for fixed indexed annuities and amassing some $426,000 in commissions in less than four months, as reported by Investment News. Thomas N. Cooper and his wife, Susan B. Cooper, have been barred from selling securities in Illinois and fined $10,000. Their business was Senior Financial Strategies Incorporated, doing business as Pinnacle Investment Advisors. Regulators indicated that from February 26, 2008 until June 9, 2008, the husband and wife team sold 65 Aviva fixed index annuities, generating some $426,281 in commissions. However, some of the transactions went back to 2006, when the couple recommended that a married couple transfer $46,000 from a Lincoln Benefit Life variable annuity in an IRA to buy an Aviva fixed indexed annuity.
The Illinois Securities office examined 12 cases involving clients who had liquidated annuities or IRAs to buy Aviva fixed indexed annuities. On average, the age of the clients were 73 years old and had incurred $122,630 in surrender charges from the liquidation of the annuities. The couple, acting as registered investment adviser representatives, was held to have a fiduciary duty to their customers, according to Illinois law and, the transactions were deemed to be unsuitable and not in their customers’ best interests, due to their age and the surrender penalties they were faced with.