Matrix Capital Group Sanctioned in Connection with Variable Annuity Sales

Matrix Capital Group, Inc. and its president, Christopher Anci are being investigated by attorneys Alan Rosca and Joe Peiffer of the Peiffer Rosca law firm, which represents investors across the country who lost money as a result of investment misconduct.

The investigation follows sanctions against Matrix and Anci by the securities regulators in connection with Matrix Capital Group and Anci’s supervision of a Matrix Capital Group representative, according to a settlement agreement entered into by Matrix Capital Group, Anci, and FINRA.

Matrix Capital Group and Anci failed to exercise reasonable supervision over variable annuity exchanges recommended by one of Matrix Capital Group’s representatives between May 2010 and April 2011, according to the settlement.

Matrix Capital Group’s representative recommended that 17 customers surrender their variable annuities and replace them with another annuity. In each case, the old annuity was exchanged for the same new annuity as that purchased by the other customers, and a surrender charge of at least $1,000 was paid by the customer, according to the settlement. The total surrender charges caused by these transactions were more than $70,000 and 16 of the 17 customers forfeited significant death and /or living benefits in the surrendered contract, according to the settlement.

Matrix Capital Group’s representative provided Matrix Capital Group with “switch forms” for each of the 17 transactions, according to the settlement. On each of the 17 switch forms, the representative wrote the same three reasons for the recommended change, however, these reasons did not provide justification for the exchanges and did not explain why the customers should incur substantial surrender charges to purchase the new variable annuity, according to the complaint.

Matrix Capital Group and Anci failed to exercise reasonable supervision over the variable annuity exchanges recommended by the representative and they failed to recognize or address the fact that the representative was selling the same product with the same features to a divergent group of customers, according to the settlement.

Matrix Captial Group was censured and fined $30,000 by FINRA. Also, Matrix Capital Group must retain an Independent Consultant before beginning to execute non-liquidating variable annuity transactions for customers so that the consultant can review and make recommendations concerning the adequacy of its supervisory and operating procedures as they relate to the review of variable annuity exchanges.

Anci was suspended from acting in any principal capacity for one month and was fined $20,000.

Matrix Capital Group and Anci agreed to sanctions levied by FINRA in order to settle their alleged rule violation, and did not deny or admit the factual findings against them.

The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. 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, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1180 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.


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