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Ameritus Investment Corporation Fined $100,000 by FINRA

By Oguz Ozdemir

FINRA, the Financial Industry Regulatory Authority, recently fined Ameritus Investment Corp. the sum of $100,000 for encouraging customers to purchase variable universal life insurance policies (VULs) by refinancing their homes or taking out home equity loans. The broker who was responsible for this campaign, Nancy Ziering, was fined $60,000 and she was suspended for nine months.

Ameritus, which is based out of Lincoln, Nebraska, was held responsible for not supervising Ziering, who works from New Jersey, for promoting her plan which was found to be misleading and unsuitable to unsuspecting customers.

It seems that Ziering had a side business, Madison Financial Aid Consultants, which was supposed to help parents prepare financially for their children's college education. She used this business to attract 220 people over a two year period from 2003 to 2005.

Ziering conducted her college planning seminars at schools and other locations that attracted parents who had children that were getting close to college age. After she was able to get people signed up for more information on financial planning for college she met with them individually and revealed her plan.

The plans themselves were detailed and hard for customers to comprehend. They were set up with strict parameters that the parents had to adhere to over a 20 year period. Through all of the confusion, the parents, eager to have financial plans in place for college for their children and retirement for themselves, were drawn into the deception.

All were pitched by Ziering to purchase variable universal life insurance policies through an affiliate of Ameritus. As most of these people were attracted to the seminars in the first place in order to find a way to raise funds, Ziering encouraged them to purchase the VULs by refinancing their mortgage or by taking out a home equity loan. Out of 220 people that she met with, Ziering was able to get 90 people to take out at least one and some took out more than one policy through Ameritas.

Ameritas was aware of the deceptive financial plans by Ziering and did not do anything to stop her from continuing. FINRA cited the company for this as well as allowing the broker to continue to use funds from the home equity and refinanced mortgage loans to purchase the VULs.

After reviewing the cases, Ameritas found that Ziering sold her plan to six different people who were in no financial condition to take on additional debt. The company refunded the money to these people and cancelled the VULs.

Even though Ameritas took this action before FINRA cited them, they nor Ziering consented to the charges but would neither admit nor deny the charges. When you put your financial life into the hands of a registered broker you should not have to suffer additional financial hardships when financial planning is suggested.

If you have been the victim of a deceptive broker who has mislead you and caused you additional financial hardship, contact our legal team at Napoli Bern Ripka at 1-888-LAW-IN-NY. We will work hard to help you reclaim your hard earned money.

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Originally posted at InjuryBoard by Oguz Ozdemir

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