FINRA fined and censured The Logan Group of Roseville, California for failing to establish, maintain, and enforce supervisory procedures related to FINRA's rules regarding investment recommendations of multi-share class variable annuities, namely B-share and L-share contracts.
AWC #2018056455201 states that The Logan Group, which primarily sells mutual funds and variable annuities to educators through salary-deferred 403(b) accounts, entered into an agreement with fund companies on Sacramento school districts' approved vendor list.
According to the report, Logan Group sold variable annuity contracts with different share class options, including B- and L-shares, wherein B share contracts typically have a seven-year surrender period while L-share contracts typically provide a shorter three-to-for year surrender period. L-shares are typically associated with higher fees than B-shares.
In its report, FINRA found that Logan Group sold 24 L-share contracts totaling approximately $2.8 million, but failed to enforce written supervisory procedures that would have required customers to complete a Variable Annuity Disclosure Form, which would have described or disclosed features of L-share contracts. These disclosures likely would have included L-shares' shorter surrender period and higher fees than a comparable B-share contract.
FINRA found that the firm failed to collect investment objective and risk tolerance information for several of its L-share contract customers.
Although FINRA described The Logan Group as a sole proprietorship with its main office and only branch location in Roseville, CA, further specifying that the firm's owner is its only registered person, it declined to name Logan Group's owner.
If you have invested with The Logan Group in Northern California, its Chief Compliance Officer Kevin Logan, or with any broker or investment adviser who has recommended fee-laden L-share variable annuities in lieu of potentially more suitable B-share contracts, and these unsuitable recommendations without regard to your objectives or risk tolerance preferences, have resulted in damages or harm to your financial interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.