Erez Law is investigating claims regarding Peter Michael Terlecky III (CRD #2301793, Grand Island, New York), who has been named a respondent in a FINRA complaint alleging that he circumvented his member firm’s supervisory and compliance procedures by concealing and failing to process variable annuity purchase transactions totaling approximately $2.3 million as annuity replacement trades, even though each purchase was funded by the sale of a fixed or variable annuity. FINRA alleges that between June 2009 and June 2011 while registered with Princor Financial Services Corp., Terlecky concealed the variable annuity replacements from the firm’s supervisory review by structuring the replacements as separate trades through a two-step process, rather than through annuity exchanges. See FINRA Case #2011029089201.
FINRA alleges Terlecky accomplished this by transferring the sale proceeds from the replaced annuity to a firm brokerage (money market) account and then, after waiting a short period, usually seven days or less, used the funds in the brokerage account to purchase the new variable annuity. Terlecky prepared and submitted new account forms and annuity documents to the firm for each of the variable annuity replacements containing numerous misrepresentations and items of false information that further disguised the true nature of these transactions, according to FINRA’s Complaint. In so doing, Terlecky allegedly earned greater commissions and avoided supervisory scrutiny, while depriving firm customers of receiving requisite firm-mandated disclosures of material facts regarding annuity replacements and the opportunity of performing a meaningful comparison between the annuities they were selling and those they were considering for purchase, and, in some instances, unnecessarily incurring new seven year surrender periods with their replacement variable annuities.
Terlecky was registered with Princor Financial Services from December 1992 to August 2011, and then permitted to resign after an internal investigation. Terlecky has been registered with MML Investor Services, LLC since November 2011.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Princor Financial Services or MML Investor Services may be liable for investment or other losses suffered by Van Doren’s customers.
If you were a client of Terlecky, Princor Financial Services, or MML Investor Services, and have suffered investment losses or financial irregularities, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”
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