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Ameritus Investment Corp. Fined $100,000 and Broker, $60,000 for Misleading Customers

By Oguz Ozdemir

Recently the Financial Industry Regulatory Authority (FINRA) cited and fined Ameritus Investment Corp. $100,000 for its part in a misleading financial plan that was delivered by one of its own brokers. Ameritus is located in Lincoln, Nebraska and the agent in question, Nancy Ziering, worked from her office in New Jersey.

The plan consisted of Ziering encouraging people to refinance their home mortgage or take out a home equity loan in order to purchase variable universal life insurance policies, also known as VULs. This plan was delivered to people who were seeking financial advice regarding college funding for their children.

Ziering had a side business, Madison Financial Aid Consultants, and used this forum to attract parents who were eager to find a way to put their college age children through school. Most of these people were already financially strapped and were looking for a way to generate funds rather than take on new debt.

Ziering would conduct seminars at schools and focuses on planning ahead for college. When people wanted more information, she met with them one on one and presented a plan that was complicated and confused the parents. Her plan required strict adherence to a detailed program that was to span over a 20 year period.

Eager to ensure their child's future education, 90 out of 220 signed up. Well, the plan was just a means for Ziering to get the unsuspecting parents to refinance their mortgage or take out a home equity loan to purchase variable universal life insurance policies through an affiliate of Ameritus.

The people who put their trust in Ziering were looking for a way to generate the funds to put their child through college not purchase life insurance policies by going further in debt. Many customers were in no financial shape to take on more debt and interestingly, Ameritus actually knew something was going on because the cancelled VULs for six customers and refunded their money.

But knowing that something was wrong and doing something about it were two different things. FINRA cited Ameritus because they believe the company knew that the broker that was representing their company was misleading her clients and pushing them to purchase financial items that they did not need nor could afford.

Ameritus was also cited and fined because even though they were aware of the deceptive practices they did nothing to get Ziering to stop. For her part, Ziering was fined $60,000 and she was suspended for nine months.

Here is a broker who preyed on parents who were only trying to help their children further their education. It is bad enough that a financial representative would abuse her position to direct people to purchase things they do not need, but when the major corporation knows about it and does nothing to stop it, that is a breach that is hard to ignore.

Don't let something like this happen to you. If you feel that you have been taken advantage of by a deceptive financial advisor, call Napoli Bern Ripka at 1-888-LAW-IN-NY. We will work with you to protect your financial status and reclaim what is rightfully yours.

Originally posted at InjuryBoard by Oguz Ozdemir

Full post as published by New York City Personal Injury Lawyer on September 01, 2009 (boomark / email).