Mark Lenert, a registered representative with NYLIFE Securities LLC, is facing a serious customer dispute allegation that has the potential to significantly impact investors. According to the disclosure on his FINRA BrokerCheck (CRD #4501352), the customer alleges that the variable annuity purchased in January 2022 was not clearly understood at the time of sale, and that she was unaware of the surrender charge associated with the policy.
The seriousness of this allegation cannot be overstated, as it raises concerns about the transparency and clarity of the sales process, as well as the potential for financial harm to the investor. Variable annuities are complex investment products that often come with high fees, including surrender charges, which can substantially reduce an investor’s returns if they need to access their funds before the surrender period ends. Investopedia defines a variable annuity as a tax-deferred retirement vehicle that allows you to choose from a selection of investments, and then pays you a level of income in retirement that is determined by the performance of the investments you choose.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Mark Lenert and NYLIFE Securities LLC in connection with this allegation. With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration.
Understanding the Allegation and FINRA Rules
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In simple terms, the customer alleges that Mark Lenert failed to clearly explain the variable annuity and its associated surrender charge at the time of sale. This lack of transparency and understanding could constitute a violation of FINRA Rule 2111, known as the “Suitability Rule.”
FINRA Rule 2111 requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as the customer’s age, financial situation, investment objectives, and risk tolerance.
Additionally, FINRA Rule 2330 specifically addresses the sale of variable annuities, requiring brokers to make reasonable efforts to obtain comprehensive customer information, perform a suitability analysis, and provide disclosures about the product’s features, risks, and costs.
Why It Matters for Investors
This allegation highlights the importance of transparency and clear communication in the sale of complex financial products like variable annuities. Investors rely on their financial advisors to provide accurate, complete information about the investments they recommend, including potential risks and costs.
When financial advisors fail to adequately explain products or disclose material information, investors may make decisions that are not aligned with their financial goals and risk tolerance. In the case of variable annuities, the lack of understanding about surrender charges can lead to significant financial losses if the investor needs to access their funds before the surrender period ends.
Moreover, this case underscores the need for investors to thoroughly review and understand the products they are purchasing, and to ask questions when something is unclear. It is crucial for investors to advocate for their own financial well-being and to hold their advisors accountable when they fail to meet their professional obligations.
Red Flags and Recovering Losses
Investors should be aware of red flags that may indicate financial advisor malpractice or misconduct, such as:
- Lack of transparency about product features, risks, and costs
- Pressure to make quick investment decisions
- Recommendations that seem misaligned with the investor’s goals and risk tolerance
- Excessive trading or churning of the investor’s account
- Unexplained or inconsistent account performance
If an investor suspects that they have been the victim of financial advisor malpractice or misconduct, they should promptly seek the advice of an experienced investment fraud attorney. Haselkorn & Thibaut offers free consultations to help investors assess their case and explore their legal options.
Through FINRA arbitration, investors may be able to recover losses caused by their financial advisor’s misconduct or negligence. Haselkorn & Thibaut‘s experienced attorneys can guide investors through the arbitration process, working tirelessly to protect their rights and pursue the compensation they deserve.
For a free consultation with the investment fraud lawyers at Haselkorn & Thibaut, call 1-888-885-7162 . They operate on a contingency basis, meaning “No Recovery, No Fee.”
