FINRA Files Complaint Against SWS Financial over Improper Variable Annuity Sales

Investment fraud lawyersOn September 29, 2014, FINRA’s Department of Enforcement filed a complaint against SWS Financial Services, Inc., which alleged that, from September 2009 to May 2011, SWS had inadequate supervisory systems as well as written supervisory procedures to supervise sales of variable annuities (VAs).  The five FINRA charges levied against SWS,  headquartered in Dallas, TX,  and a FINRA member since 1986, include an allegation of inadequate supervisory systems and written supervisory procedures to supervise VA business, poor supervision and review of VA deals, failure to have registered principal review of VAs before submitting the application to the insurer, failure to have surveillance procedures to detect improper VA exchanges, and failure to develop and document a detailed training plan for supervisory review of VA deals. FINRA further alleges that SWS, which has about 189 branch offices employing 313 brokers, sold to customers without a reasonable basis to believe that the investment was suitable.

FINRA’s Enforcement Department Seeks Disciplinary Action

FINRA’s enforcement department is seeking disciplinary action, which includes unspecified monetary sanctions, and an order that SWS should be made responsible for the costs of the proceeding. While SWS was inadequate its supervisory framework for VAs, FINRA alleges, sales of variable annuities made up 16% to 20% of SWS‘ total revenue from September 2009 to May 2011. In this same time period, FINRA reports, more than 70% of the VA business generated sans onsite supervisor was sent to insurers without ever having been reviewed by an SWS securities principal.

Investment Fraud Lawyers Investigating

The Peiffer Rosca Wolf securities attorneys often represent investors who lose money as a result of investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1225 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.