Articles Tagged with alert

The Financial Industry Regulatory Authority (FINRA) announced on July 19, 2016 in a News Release that it had fined Prudential Annuities Distributors, Inc. $950,000 for “failing to detect and prevent a scheme that resulted in the theft of approximately $1.3 million from an 89-year-old customer’s variable annuity account.  Prudential Annuities Distributors acts as a principal underwriter and distributing broker-dealer for life and annuity products issued by its affiliates.

According to the News Release, a former registered Sales Assistant named Travis Wetzel, who worked at LPL Financial, stole money from the elderly customer’s account by submitting to Prudential Annuities Distributors 14 forged annuity withdrawal requests.  The News Release detailed that each month, from July 2010 to September 2012, Mr. Wetzel submitted 4 to 5 withdrawal requests totaling approximately $50,000.  The News Alert detailed that all withdrawn funds were deposited into an account in Mr. Wetzel’s wife’s maiden name that was controlled by Mr. Wetzel.

Prudential Annuities Distributors consented to the fine by submitting a Letter of Acceptance, Waiver and Consent No. 2012034423502 (AWC).  According to the AWC, each transaction submitted by Mr. Wetzel triggered an alert, or a “red flag,” putting Prudential Annuities Distributors on notice that his requests may be fraudulent.  Each alert required that a person manually review and confirm each transaction, and for each transaction, personnel determined the activity appeared legitimate, according to the AWC.  The AWC also noted that for 44 transfers, Prudential Annuities Distributors also determined that the withdrawn funds were paid to the customer, when they were not actually sent to the customer.

Financial Industry Regulatory Authority (FINRA ) issued a new investor alert this week, Messaging Apps Are Latest Platform for Delivering Pump-And-Dump Scams,  warning investors to be wary of investment schemes forwarded to them on the popular messaging platform WhatsApp.

Recently, there were messages forwarded on the WhatsApp platform, claiming that the stocks of the microcap company Avra Inc (OTC: AVRN) were set for double digit growth. FINRA’s Senior VP for Investor Education, Gerri Walsh warned that financial schemers are keeping up with times and leveraging popular technology platforms to bilk investors. In this instance, the financial prediction about AVRA stocks appeared to be coming from well-known brokerage firms.

In traditional pump and dump schemes, microcap stocks are artificially inflated by fraudsters through false and misleading statements, to sell their cheaply purchased stocks at a high price. Once all the overvalued stocks are “dumped” by them, the prices crash and investors lose their money. This latest Avra scam is a variation of the pump-and-dump, where they were trying to use the mass message push feature to inflate the price of the stock and then leave investors holding nearly worthless investments.

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