Ameritas Investment Corp. has agreed to pay a $145,000 Finra fine for failing to supervise sales of equity-indexed annuities.
The firm began treating the sale of equity-indexed annuities (EIAs) as an outside business activity in October 2013 as a result of the Dodd-Frank Act, which established that the products were not securities.
But AIC failed to catch cases where securities were being liquidated to fund annuity sales, according to a settlement approved by Finra Wednesday.
As a result, AIC “did not evaluate whether its registered persons' sales of EIAs for compensation should be treated as outside securities activities,” Finra said.
Outside securities activities need to be recorded and supervised by broker-dealers.
In mid-2016, AIC resumed supervising and recording the sales of EIAs, Finra said.
AIC, a B-D owned by Ameritas Life Insurance Corp., serves nearly 1,400 reps.
In settling the case, AIC neither admitted to or denied the allegations.
“Ameritas Investment Corp. (AIC) has cooperated fully with regulators to address their concerns,” said company spokeswoman Ann Avery.