FINRA Fines Ameritas Investment Corp. For Inducing Customers To Take On Additional Mortgage Or Home Equity Debt to Buy Securities

The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Ameritas Investment Corp., of Lincoln, NE, $100,000 and has suspended and fined one of its brokers for inducing customers to take on additional mortgage and/or home equity debt in order to purchase variable universal life insurance policies (VULs). Those policies were pitched to customers as mechanisms for funding college expenses and retirement.

Ameritas was sanctioned for failing to adequately supervise broker Nancy Ziering, who was based in New Jersey, and for advertising violations related to her financial plans. FINRA found that the financial plans she created and were misleading and that her recommendations to customers to purchase VUL policies were unsuitable. Ziering was fined $60,000 and suspended for nine months.

"Brokerage firms must exercise vigilance when their brokers recommend that customers use mortgage proceeds to purchase securities," said Susan L. Merrill, Executive Vice President and Chief of Enforcement. "FINRA will aggressively pursue firms and individuals who use misleading financial plans to induce customers to purchase securities, particularly when those plans propose that customers refinance their homes or take out home equity loans to pay for the purchase of securities. Their home is the biggest and most valuable asset that most Americans have. They should not be putting that asset at risk to buy securities."

Source: FINRA press release