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Northwestern Mutual Investigated for Allegedly Misleading Marketing Material

Securities Lawyer Jonathan Kurta
By: Jonathan Kurta Author
March 3, 2023 at 2:14pm

FINRA is investigating four Northwestern Mutual brokers for allegedly sending customers misleading marketing materials. Investors should keep reading if they have any concerns about their Northwestern investments.

As of March 1, 2023, the four brokers named in the allegations have not been terminated by Northwestern Mutual.

Misleading Marketing Material Allegations

Scott Christensen, a Northwestern Mutual supervisor, allegedly failed to supervise several brokers who allegedly sent marketing emails that contained misleading statements concerning their experience and client base. This is according to his BrokerCheck record, accessed on March 1, 2023.

The brokers in question–Brian Belliveau, J. Quinn Hogan, and Stephen Graham–are all under investigation by FINRA. Each investigation alleges they used an unapproved form to obtain client data for the purpose of applying for life insurance policies. Brokers typically earn a commission for these types of products, part of which goes to the firm. This fee structure presents a conflict of interest that investors should know about.  

Brian Belliveau also allegedly sent marketing emails that the New Hampshire Insurance Department believes misrepresented his client base. He also allegedly requested that two non-licensed individuals call prospects on his behalf.

Securities Lawyer Jonathan Kurta
Written by: Jonathan Kurta

Jonathan Kurta is an accomplished securities attorney and a founding partner at Kurta Law.

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Which Rules Did Northwestern Mutual Brokers Allegedly Violate?

The Northwestern Mutual brokers allegedly violated FINRA Rule 2210 and FINRA Rule 3310.  

FINRA Rule 2210

FINRA provides guidance on communications with customers in Rule 2210.

  • This rule stipulates that communications must be fair and balanced, and provide a “sound basis for evaluating the facts in regard to any particular security…or service.”
  • The rule further prohibits making misleading statements – including false, exaggerated, or promissory statements.
  • Communications should also offer a balanced description of the potential risks and benefits of a financial product.

FINRA Rule 3110

FINRA Rule 3110 requires brokerage firms to have a supervisory system in place designed to achieve compliance with existing securities laws. Supervisory duties include reviewing marketing materials.

View from the street of the One World Trade Center

Northwestern Mutual Background

Investors with Northwestern Mutual should review the allegations found in the firm’s detailed BrokerCheck record.

Alleged Conversion of $473,496

According to an Acceptance, Waiver & Consent agreement (AWC) filed on April 7, 2020, Northwestern Mutual consented to the findings that it failed to supervise the transmittal of funds from customer accounts to outside entities.

Allegedly, a Northwestern registered representative converted $473,496 from his customers variable annuities by forging their signatures on distribution requests. This allegedly happened at a time when the representative was experiencing financial hardships. FINRA alleges that Northwestern did not take reasonable steps to ensure that the customers controlled the bank accounts where the distributions were sent.

As part of the terms of the AWC, Northwestern consented to a fine of $350,000.

Allegations of Misleading Marketing Materials

The recent New Hampshire allegations are not the first allegations of misleading marketing materials filed against Northwestern Mutual.

According to an AWC dated September 2, 2009, Northwestern Mutual allegedly did not provide fair and balanced information in their marketing materials for Auction Rate Securities (ARS).

Auction Rate Securities are long-term investments with interest rates determined by auctions. After interest in these investments fell off following the 2007-2008 Financial Crisis, the market for ARS collapsed. Because these were illiquid, long-term investments, many investors could not withdraw their funds.

The AWC alleges that Northwestern Mutual failed to ensure that its representatives accurately describe ARS to customers, especially regarding their liquidity.

As part of the terms of the AWC, Northwestern Mutual consented to a fine of $200,000. You can read a copy of the AWC here.

Did You Lose Money with Northwestern Mutual?

If you lost money after working with a Northwestern Mutual broker, you should consider consulting with a securities attorney. Our attorneys offer free consultations and do not earn a fee unless they win their case. Call (877) 600-0098, email info@kurtalawfirm.com, or use our live chat to get in touch today.