FINRA fined and suspended former LPL Financial (Orem, UT) broker Brent Van Lott for purportedly facilitating a non-registered individual, Steven Heinz, in effecting variable annuities (VA) and mutual funds sales to fund the purchase of fixed annuities issued by an insurance company, finding that Lott made false statements, falsely represented that he met in person with a customer when he had not, and misrepresented that he knew his customers longer than he had.
FINRA specifically charged Lott with aiding and abetting Heinz's Ponzi-like scheme, making false certifications, statements, or representations on at least 10 suitability forms and 24 additional forms submitted to the insurance company that issued the annuities, which involved recommending that his clients exchange variable annuities for fixed annuities. Investigators claim Lott misrepresented that he had discussed suitability issues with customers when no such cost-benefit discussions took place.
Heinz, who was formerly registered with FINRA, but was no longer registered when Lott allegedly facilitated transactions on his behalf, thus enabling him to act as a de facto (unregistered) broker, drew the SEC's ire, which charged Heinz with operating a $4 million Ponzi scheme by using investor funds for personal expenses and to pay principal and interest payments to earlier investors.
FINRA found that Heinz's illicit scheme involved at least three customers for whom Lott effected transactions, one of whom filed a complaint with LPL alleging he was a victim of the Heinz Ponzi and that Lott had effected transactions on his behalf without having met with him, including allegations that a forged signature made its way onto contract documents to acquire insurance policies issued by Pacific Life.
The investigation states in exchange for Lott's service as registered representative of record at LPL for 13 of Heinz's customers, and in order to avoid a direct link with Lott, Heinz arranged to pay Lott's wife $114,633 in commissions on his behalf; LPL ultimately paid Lott an additional $104,940 in commissions for a total of nearly $220,000 in commissions related to the illicit Heinz scheme and annuity transactions recommended by Heinz and effected by Lott.
FINRA found that Lott made false representations on at least 32 documents, including insurance company applications and suitability forms.
After LPL Financial terminated Lott (CRD #1559744) from its Orem, Utah branch for violating the firm's document signature policy, Lott became associated with Girard Securities of San Diego, California until November 2017, when he joined Cetera Advisor Networks of Orem. Lott separated from Cetera in February 2018.
In response to his separation from LPL Financial, Lott disputed the insinuation that he was part of a Ponzi scheme, writing, "there was no deception or deceit on my part."
In agreeing to settle charges with FINRA, Lott consented to the entry of, but did not affirm or deny FINRA's charges that he falsified documents, aided and abetted Heinz's violation of federal securities law, and caused LPL's records to be inaccurate.
If you have invested with former LPL Financial broker Brent Van Lott to exchange variable annuities for insurance company-issued fixed annuities based on an unsuitable recommendation from the unregistered Steven Heinz, or have been the victim of a Ponzi or other fraudulent financial scheme, including being party to transactions that were unauthorized, misrepresented, or excessive, and caused harm to your investments or financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.