INVESTOR ALERT—Wolper Law Firm Is Currently Investigating Potential Claims Against The Leaders Group, Inc., Based In Littleton, CO
The Wolper Law Firm is currently investigating claims against The Leaders Group, Inc., a brokerage firm based out of Littleton, Colorado.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on July 2, 2018, The Leaders Group was censured by FINRA for the following sales practice activities:
- “Failure to Supervise and Retain Consolidated Reports”
- “Failure to Conduct Inspections of Non-Branch Offices”
- “Deficient Heightened Supervision Procedures”
- “Failure to Document the Review and Evaluation of Outside Business Activities”
- “Email Deficiencies”
- “Variable Annuities Supervisory Deficiencies”
- “Communications with the Public Deficiencies”
- “Improper Payment of Commissions”
The Leaders Group was fined $95,000 and was ordered to, among other things, submit a formal plan to resolve the aforementioned deficiencies.
The Leaders Group, Inc., touts itself as the “premier broker-dealer for brokerage general agents, insurance agents and independent financial advisors.” The Leaders Group has approximately 719 registered representatives in 26 branch offices and 460 non-branch locations. Non-branch locations are of particular concern because often times they are not supervised on a day-to-day basis. Non-branch locations can consist of the homes of private offices of registered representatives.
According to FINRA, the Leaders Group “conducts a general securities business and is primarily involved in the sale and distribution of variable annuities and variable life insurance products.”
A variable annuity is complex hybrid financial and insurance product that offers investors a stream of income, tax deferment and a death benefit. The sub-accounts of an annuity are generally invested in mutual funds, the selection of which will dictate the potential performance of the annuity. While there are benefits of variable annuities, they are often outweighed by the risks and other features.
For example, variable annuities may include high annual management fees, surrender charges, lock-up periods, and mortality charges. In addition, it is commonly misunderstood that variable annuities offer guaranteed investment returns. They do not. Many financial advisors fail to disclose that investment returns may be impacted by market conditions.
Many financial advisors recommend annuities because they generate high sales commissions relative to other financial products. Unscrupulous financial advisors may also engage in annuity “switching,” which refers to the practice of selling one annuity and purchasing another. Often times the “switch” is justified by the financial advisor by suggesting that the annuity purchased has superior features when any such enhanced feature is actually outweighed by the cost of the “switch.”
The Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have cautioned customers to be aware of “bonus credits” offered to financial advisors for selling certain variable annuity products
If you or someone you know was a customer of the Leaders Group, Inc. or one of its Financial Advisors and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at firstname.lastname@example.org to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyers who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. His industry insight, experience and knowledge gives his clients a competitive advantage.
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