Unit Investment Trust (UITs) Improper Sales Investigated by Securities Lawyers

Cleveland stockbroker fraud lawyerPeiffer Rosca Wolf Attorneys Investigate Improper Sales of Unit Investment Trusts or “UITs”

The securities attorneys at Peiffer Rosca Wolf, Joe Peiffer and Alan Rosca, have launched an investigation into improper sales of Unit Investment Trusts, known as “UITs” in the securities industry. According to the Financial Industry Regulatory Authority (“FINRA”), UIT investments are complex and often volatile and risky.  UITs involve an investment company issuing a type of security, which is itself an undivided interest in an underlying portfolio of securities. The Peiffer Rosca Wolf investigation into UITs is focused on sales techniques used by brokerage firms and investment professionals who, in some instances, have improperly recommended UITs to their customers.

Brokers generally have a duty to conduct reasonable diligence on investment products they recommend to customers, including UITs. Brokerage firms have a duty to reasonably supervise their brokers and establish certain supervisory procedures that are reasonably designed to achieve compliance with the securities industry rules.

The Peiffer Rosca Wolf securities attorneys are preparing to take action in connection with one such stockbroker’s alleged recommendations of UITs to his customers without having a reasonable basis for the recommendation and without understanding important risks of UITs. The securities industry regulators recently filed an enforcement action against that stockbroker, alleging that he made negligent misrepresentations and violated FINRA rules in connection with his recommendations of UITs.

Other Firms Investigated by FINRA for Inappropriate Sales Practices Involving UITs

That stockbroker is not the only investment professional who has been investigated by FINRA in connection with improper sales practices involving UITs. FINRA investigated and took UIT-related actions against 12 brokerage firms recently. These included:

MetLife Securities, Inc.: FINRA alleged that MetLife Securities, Inc. (“MetLife”) failed to apply sales charge discounts to UIT purchases, which resulted in customers paying excessive sales charges of over $349,000. MetLife was censured, fined $300,000 and ordered to pay restitution to its clients, which it has done.

Infinex Investments, Inc.: FINRA alleged that Infinex Investments, Inc. failed to apply sales charge discounts to 431 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $109,628. Infinex was censured, fined $150,000, and ordered to pay restitution, which it has done.

Commonwealth Financial Network: FINRA alleged that Commonwealth Financial Network failed to apply sales charge discounts to 2,361 eligible UIT purchases, which resulted in customers paying excessive sales charges of approximately $320,917. Commonwealth Financial was censured, fined $225,000 and ordered to pay restitution, which it has done.

Cetera Advisors, LLC: FINRA alleged that Cetera Advisors, LLC failed to apply sales charge discounts to 2,222 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $452,622. Cetera Advisors, LLC was censured, fined $250,000 and ordered to pay restitution. Cetera Advisors has paid restitution to all affected customers.

Huntington Investment Company: FINRA alleged that Huntington Investment Company, an affiliate of Huntington National Bank, failed to apply sales charge discounts to 302 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $60,973.96. Huntington Investment Company was censured, fined $75,000, and ordered to pay restitution. Huntington has paid restitution to all affected customers.

Securities America, Inc.: FINRA alleged that Securities America, Inc. failed to apply sales charge discounts to 2,406 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $477,686.88. Securities America was censured, fined $275,000 and was ordered to pay restitution, which it has done.

Park Avenue Securities, LLC: FINRA alleged that Park Avenue Securities, LLC failed to apply sales charge discounts to 2,715 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $443,255.07. Almost all the missed sales charge discounts involved missed rollover and exchange discounts. The firm was censured, fined $300,000, and ordered to pay restitution, which it has done.

First Allied Securities, Inc.: FINRA alleged that First Allied Securities, Inc. failed to apply sales charge discounts to approximately 3,712 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $689,647.34. First Allied Securities, Inc. was censured, fined $325,000, and ordered to pay restitution. The firm has made restitution payments to affected customers.

Fifth Third Securities, Inc.: FINRA alleged that Fifth Third Securities, Inc. failed to apply sales charge discounts to 5,107 eligible UIT purchases, resulting in customers paying excessive sales charges of approximately $663,534.23. Fifth Third Securities, Inc. has been censured, fined $300,000 and order to pay restitution to affected customers, which it has done.

Comerica Securities, Inc.: FINRA alleged that Comerica Securities, Inc. failed to apply sales charge discounts to 723 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $197,757.78. Comerica Securities, Inc. was censured, fined $150,000, and ordered to pay restitution, which it has done.

Ameritas Investment Corp.: FINRA alleged that Ameritas Investment Corporation failed to apply sales charge discounts to 806 eligible UIT purchases resulting in customers paying excessive sales charges of approximately $128,544. Ameritas Investment Corporation was censured, fined $150,000, and ordered to pay restitution, which it has done.

All these brokerage firms consented to the entry of the findings by FINRA without either denying or admitting the alleged misconduct.

Investor Rights Lawyers Investigating

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

Investors who believe they have lost money as a result of recommendations of unsuitable investments made by their financial professionals 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 or by email at arosca@prwlegal.com.

Alan Rosca (1168 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.