Alfred Chan Fined & Suspended for Unauthorized Indexed Annuities Sales, REIT Risk Disclosure Failures

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FINRA suspended northern California broker Alfred Kai Kwong Chan and fined him $10,000 for improperly selling over 100 indexed annuities valued at $2.5 million without properly disclosing the sales to his employing firm. The misconduct also includes distribution of an unapproved newspaper advertisement that lacked adequate risk disclosure concerning a non-traded real estate investment trust (REIT).

FINRA AWC #2013039301501

According to the investigation, Chan was associated with Signator Investors, Inc. in Walnut Creek, CA through 2013 and sold fixed insurance products through an outside insurance agency while selling securities through Signator, an arrangement approved by the firm. The report states that even though Signator explicitly required all indexed annuity business to be submitted through the firm, Chan nonetheless sold 105 indexed annuities with a value of about $2.5 million without going through Signator.

Chan allegedly did not disclose these sales—nor the compensation he received from them—and furthermore published an unapproved advertisement in a community newspaper prior to conducting seminars. The advertisement purportedly mentioned a non-traded REIT product by name and the positive attributes of the REIT, but failed to address the product's risks.

FINRA concluded that Chan violated NASD Rules concerning "fair and balanced" communications with the public by publishing the unapproved ad that failed to adequately address risks associated with the non-traded REIT.

Chan's BrokerCheck report states that after being discharged from Signator in December 2013 for failure to follow firm procedures and using unapproved sales advertising material and seminars, Chan joined Ni Advisors in Oakland, where he remained until January 2016. The record also indicates a pending customer dispute alleging Chan sold his client insurance that they did not need and that upon termination, the customer faced large surrender charges.

If you have invested with California broker Alfred Kai Kwong Chan, or with any broker or financial adviser whose unapproved sales away from their firm, inappropriate advertising materials, or failure to adequately disclose risk associated with annuities, REITs or other securities has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

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