FINRA’s Department of Enforcement investigated Diehl and alleged he solicited investors to purchase Equity Indexed Annuities between September and October 2014. Equity-indexed annuities are complex products that are hybrid of both fixed and variable annuities and offer a minimum guaranteed interest rate combined with an interest rate linked to a market index.
FINRA alleged Diehl submitted the applications directly to the issuer of the EIAs, even though the EIAs were approved for sale by Park Avenue Securities to firm customers. As a result, Mr. Diehl bypassed the supervisory review and approval of the sales of the EIAs by Park Avenue Securities. According to FINRA, Diehl earned $55,000 in commissions due to the sale of these securities.
Based upon the foregoing misconduct, FINRA alleges Diehl violated FINRA Rule 3270, as well as FINRA Rule 2010. Specifically, FINRA Rule 3270 states: “No registered person may … have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member, in such form as specified by the member.” Outside business transactions and selling away are prohibited activities because they serve to undercut the supervisory system implemented by FINRA-member firms and FINRA itself to protect the investing public.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment damages investing in Equity Indexed Annuities with Diehl while Park Avenue Securities employed him, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.