FINRA suspended James Martin Higgs and fined him $10,000 for improper equity-indexed annuities ("EIAs") sales made outside the scope of his employment with and without the knowledge or consent of his employing firm, Pruco Securities, LLC.
According to the FINRA investigation, Pruco placed Higgs on probation for selling EIAs outside of Pruco's sponsored EIA sales program, the probation beginning in January of 2009.
Even though he was on probation for selling EIAs improperly, Higgs allegedly again improperly sold the EIAs outside of Pruco's program without providing prompt written notice to Pruco, resulting in $674,804.61 of unauthorized sales, for which Higgs received $22,838.50 as compensation.
Brokerage firms are required to supervise their brokers, regardless of whether the brokers are selling are securities, insurance, other investments, or cookies. Generally, brokerage firms prohibit outside sales activities of their brokers since they are difficult to supervise and FINRA arbitration panels often hold firms responsible for their representatives outside business activities.
Whether through written supervisory procedures ("WSPs"), or other compliance/control standard practices, firms generally instruct their employees—brokers, advisers and other financial professionals—on how to and how not to conduct securities and non-securities-related transactions, such as Pruco's insistence that Higgs and other brokers use the firm's sponsored EIA sales program.
If you have invested with James Martin Higgs or with another broker or adviser who has effected a securities transaction outside of the scope of his/her employment with a FINRA-member firm, 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.