According to Investment News, the Utah Division of Securities is looking to fine CUSO Financial for all of the following defects: CUSO’s failure to comply with the regulatory requirements governing networking arrangements between broker-dealers and credit unions; CUSO’s apparent approval of the use of misleading sales and advertising materials and other information provided to customers and the public; CUSO’s failure to follow and enforce policies and procedures, and; CUSO’s failure to reasonably supervise the businesses run through the credit unions. Vernon Litigation Group is troubled, but not surprised by these regulatory concerns.
From our perspective as Investor Rights Attorneys, we believe that how CUSO discloses its relationship with credit unions is very important for potential investors to understand. As detailed below and long before the Utah Division of Securities, we raised concerns over brokerage firms, including CUSO specifically, working so closely with credit unions and the investors who trust those credit unions.
As early as 2015, we publicly warned that our investigation indicated that almost half of CUSO’s annual revenue in 2014 was generated through the sales of variable and equity-index annuities. This concerned our law firm because regulatory records (CUSO’s ADV) at the time reflected that the bulk of CUSO’s business were smaller investors rather than high net-worth investors. In fact, 2014 records reflected that CUSO’s average client account size was less than $200,000. It appears to us that the trusted credit unions are providing CUSO a steady pipeline of new working class and retired investors who may be lulled into a false sense of credit union security and sold annuity or other insurance products that make a lot of money for CUSO and its sales force, but that may not be in the best interests of the credit union’s trusting customers.
Vernon Litigation Group has been writing for decades regarding our concerns that annuities are oversold to investors not because they are great for investors, but rather because they are usually very profitable for the insurance companies who create them and the broker that sells them.
ABOUT VERNON LITIGATION
Vernon Litigation Group is a financial litigation law firm with offices in Naples, Florida, and Atlanta, Georgia that represents clients in courtroom litigation, arbitration, including FINRA arbitration, negotiation, and mediation throughout the United States. Our lawyers have collectively represented hundreds of clients in financial disputes in arbitration and litigation nationwide and recovered hundreds of millions of dollars from purported financial professionals and financial institutions, both large and small. Please contact us to discuss your rights if you believe an insurance or investment professional has failed to act in your best interests or otherwise abused your trust with respect to insurance products, such as annuities or other investment products or services.
For more information, visit our website or contact Vernon Litigation Group at:
Phone: (239) 319-4434
Email: info@vernonlitigation.com