FINRA Bars Broker Bernard McGee

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FINRA Bars Broker Bernard McGee

FINRA barred broker Bernard McGee and ordered him to pay about $250,000 in penalties for fraudulent annuity recommendations he made to an elderly customer. According to FINRA, he surrendered four variable annuity policies owned by the 71 year old customer valued at roughly $500,000 and used the money to purchase a charitable gift annuity from a company that was later discovered to be a fraud.

McGee allegedly made material misrepresentations to persuade the client to surrender the variable annuities, which made up approximately fifty percent of her net worth, and buy the charitable gift annuity by misrepresenting to her that she was facing a large tax liability, which the new annuity would offset.

McGee also failed to disclose to his client that he would receive a ten percent commission of about $50,000 upon the purchase of the charitable gift annuity from the company 54Freedom, says FINRA. The client incurred about $36,000 in surrender charges.

Because of the willful omissions of material fact, which constitutes securities fraud, in addition to the unsuitable nature of the recommendation, FINRA ordered Bernard McGee to pay about $238,000 plus interest, restitution, and around $14,000 in hearing fees.

The case was on appeal from a prior hearing beginning at the end of 2013. FINRA’s decision in the appeal was somewhat more lax than that in the original hearing. It declined to impose sanctions for three causes of action, in light of barring McGee from the industry for separate causes of action, and overturned the decision to disgorge the commissions received by McGee.

McGee was registered with Cadaret Grant & Co. Inc. at the time of the alleged misbehavior.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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