The SEC charged former LPL Financial brokers Jonathan Dax Cooke, Danny Scott Hood, Christopher S Laws, and Brandon Preston Long with fraudulently enticing federal employees to roll over holdings from their existing Thrift Saving Plan retirement accounts into variable annuity (VA) products with higher fees and commissions managed by Keystone Capital Partners, Inc. aka Federal Employee Benefits Counselors (FEBC), an entity unaffiliated with the federal government despite its name.
The SEC cited the brokers for giving a false impression that they were affiliated with the federal government when their VA had no such association nor any federal government approval or endorsement. In addition to the misleading FEBC name, For instance, Cooke & company allegedly used an eagle-style stamp or seal on their documents that resembled a bona fide federal government logo, used language from an actual federal form on their non-government documents, and alternately hid or obscured the fact that they were associated with a private broker-dealer.
The LPL foursome allegedly perpetrated the fraudulent scheme to sell variable annuities by misleading investors concerning "significant details" about the VAs, such as inaccurate information about supposedly "guaranteed" returns, and omitted key information and/or falsely described the VA, including its surrender fees and "much higher costs than alternatives available through" the fed's program, including the private VA's significantly higher annual fees.
In all, the four defendants sold over $40 million-worth of the private VAs to federal employees and collectively earned $1.7 million in commissions for the sales.
The SEC found that Hood and Long made additional oral misrepresentations or omissions and misrepresented or failed to disclose the VA's associated fees, while finding that all four knowingly, intentionally, and/or recklessly engaged in a scheme to defraud.
Laws and Cooke co-own the private entity "Federal Employee Benefits Counselors," and they were additionally charged with engaging in fraudulent practices using sales or marketing material through interstate mail.
FINRA BrokerCheck Reports:
Jonathan Dax Cooke (CRD #5365691): LPL discharged Cooke over "concerns regarding business practices, including communications with customers. A pending customer dispute concerns a VA contract the customer "did not fully understand."
Danny Scott Hood (CRD #3236852): A settled customer dispute alleged sale of an unsuitable variable annuity resulting from a rollover from the Thrift Savings Plan. After leaving LPL, Hood was associated with BCG Securities and Summit Brokerage Services, Inc.
Christopher S Laws (CRD #4479529): LPL discharged Laws for the same reason as Cooke and, like the others, Laws joined BCG Securities after his separation from LPL.
Brandon Preston Long (CRD #5975459): LPL discharged Long over "concerns regarding communications with a customer," upon which Long became associated with BCG Securities, Inc.
According to Long's file, for instance, Federal Employee Benefits Counselors is described as "non-variable insurance / life, pension counseling and sales," while Keystone is listed as "Keystone Wealth Management, Keystone Capital Partners & Federal Employee Retirement Counselors."
According to SEC investigators, Keystone and FEBC are not affiliated with, endorsed, nor approved by the federal government, despite the inclusion of "federal employee retirement counselors" in the outside business activity listing.
If you have invested with former LPL Financial and BCG Securities brokers Jonathan Dax Cooke, Danny Scott Hood, Christopher S Laws, Brandon Preston Long, or with any representative or financial adviser who has induced or solicited an unsuitable VA or other transaction through the use of misleading, false, or omissive marketing materials or misrepresentations of fact—such as portrayal of an association with the federal government when no such relationship exists—and such illicit sales have proven harmful to your investments or interests through excessive fees, sales charges, or commissions, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.