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FINRA reached a settlement with six member firms for "failures to reasonably supervise early rollovers of Unit Investment Trusts ("UIT"), which caused customers to incur potentially excessive sales charges." The settlements were the result of a targeted examination of UIT early rollovers.
In a press release on the success of the targeted examinations (or "sweep"), FINRA stated that "a registered representative who recommends that a customer sell his or her UIT position before the maturity date and then 'roll over' those funds into a new UIT causes the customer to incur greater sales charges than if the customer had held the UIT until maturity, raising suitability concerns."
As a result of FINRA's review, the various firms that are part of the settlement have agreed to pay an aggregate of $16.8 million in restitution to approximately 10,000 investors, as well as an additional $6.6 million in fines.
Primary Sources
- FINRA Announces Final Results of Targeted Examination of Unit Investment Trust Early Rollovers
- Targeted Examination Letter on Unit Investment Trust Rollover Review
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