The Financial Industry Regulatory Authority suspended stockbroker Jeffrey Alan Hutman, formerly of Pruco Securities, LLC, through March 31, 2013 and fined him $10,000 for allegedly recommending numerous customers exchange variable annuities (VAs) held with their original FINRA-member firm for equity indexed annuities (EIAs) sold through another company.
FINRA's investigation discovered that from 2008 to 2010, Hutman had advised 27 customers to exchange their existing VAs—held with Pruco—to EIAs from another, outside company. At the time, Pruco's written supervisory procedures explicitly prohibited such aforementioned outside business activities without prior written approval from the firm. Hutman was found to have failed to secure this permission.
Furthermore, Hutman was found to have failed to disclose this outside business activity on a subsequent monthly compliance attestation. Within six months of the alleged violative conduct, Pruco terminated Hutman's registration.
FINRA requires its member firms and registered individuals (stockbrokers) to comply with a comprehensive series of rules and regulations to safeguard the member firms and their customers. A broker may not start "selling away" or transfering products, such as variable annuities, from one FINRA-member firm to a different, unrelated company, unless the broker previously disclosed the activity to the member firm and received its approval. When a member firm permits such activity, the firm must track and supervise the transactions just as if they were executed with the member firm. Between the loss of revenue and the need to supervise such transactions, most FINRA firms do not allow their stockbrokers to engage in such activities.
In this case, Hutman had his clients sell or "surrender" their variable annuities for higher-risk and often higher-commission paying Equity-Indexed Annuities.
If you have invested with Jeffrey Alan Hutman, Pruco Securities, or with any other broker or firm who you suspect has made an inappropriate recommendation or effected an improper transfer or sale, and such misconduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.