Investors: Did You Lose Money with an NYLife Securities Broker?
NYLife Securities (CRD#: 5167) has a pattern of hiring brokers who have disciplinary actions and investor disputes on their records. The New York City-based brokerage firm has approximately 2,500 branch offices and 9,000 registered brokers.
The firm has its own disciplinary record, with a total of 20 regulatory disclosures. Financial products named in these disclosures include mutual funds and variable annuities. If you have used NYLife Securities, you should review your portfolio—especially if an NYLife broker recommended mutual funds or high-risk variable annuities.
Between 2015 and 2020, NYLife brokers were the subject of 42 FINRA regulatory actions—these allegations resulted in significant fines as well as disciplinary actions.
FINRA Takes Action Against Firms with Histories of Misconduct
FINRA Rule 4111 imposes special restrictions on firms with large numbers of customer disputes. It took effect in January 2022 and FINRA will begin evaluating firms in June 2022. Restricted firms will be required to have money set aside to settle investor disputes.
Before FINRA adopted Rule 4111, if a brokerage firm did not have money to pay FINRA arbitration awards, investors had little recourse to recover their losses. However, Rule 4111 does not guarantee that investors will be able to recover their funds. Speak to a securities attorney if you want to recover your money as efficiently as possible.
Recent Alleged Broker Misconduct
Barred NYLife Brokers
Kurta Law knows of at least eight NYLife Securities brokers who have been barred by FINRA between 2020 and 2021:
- Arieh Israel: https://brokercheck.finra.org/individual/summary/4670150
- Jeffrey Anderson: https://brokercheck.finra.org/individual/summary/5993214
- Kyle Wittgren: https://brokercheck.finra.org/individual/summary/6221630
- Alexis Cooke: https://brokercheck.finra.org/individual/summary/5598604
- Alan New: https://brokercheck.finra.org/individual/summary/2892508
- Gabriel Hynes: https://brokercheck.finra.org/individual/summary/3152541
- Kari Bracy: https://brokercheck.finra.org/individual/summary/5656186
- Piero Dilorenzo: https://brokercheck.finra.org/individual/summary/4670150
NYLife Brokers Investor Disputes
Certain NYLife brokers racked up long lists of customer disputes before they faced regulatory action or termination. None of these brokers were fired by NYLife—two were barred by FINRA and one was permitted to resign.
- Alan New (CRD #: 2892508) settled 15 investor disputes alleging he recommended unregistered securities, including Woodbridge Mortgage Investment Fund and Future Income Payments LLC. Investors alleged Alan New recommended these investments between 2014 and 2016, while he was registered with NYLife Securities.
- While registered with NYLife Securities, Felix Chu (CRD #: 2427593) allegedly misled investors into purchasing promissory notes. These disputes settled for $375,000. There are four pending disputes also alleging misrepresentations of promissory notes.
- NYLife Securities hired Jordan Selfgott (CRD #: 5982408) despite his criminal charge for criminal possession of a forged instrument. He was permitted to resign following allegations he signed a customer’s name on a life insurance application.
Regulation Best Interest
Under Regulation Best Interest (Reg BI), brokerage firms are required to disclose whether the firm or any of their representatives have any disciplinary records. This information appears in the firm’s Relationship Summary. However, the information provided in the Relationship Summary is of limited usefulness. The NYLife Securities relationship summary simply states, “Yes. Visit Investor.gov/CRS for a free and simple search tool to research us and our financial professionals.”
It is up to investors to look up the firm’s CRD number in BrokerCheck and then navigate to the “Detailed Report” to find information on the firm’s disciplinary history. FINRA should make it easier for investors and require firms to include their full disciplinary history in the Relationship Summary.
Regulatory Actions
For a summary of NYLife Securities’ recent disciplinary history, keep reading.
Unsuitable Mutual Fund Switches
On October 25, 2021, NYLife Securities consented to the findings that they did not detect instances of unsuitable trading patterns of Class A mutual funds. Class A mutual funds charge upfront fees, the majority of which is paid to the stockbroker. These upfront fees make them unsuitable for short-term trading or “switches.”
FINRA alleged that an NYLife Securities broker recommended a series of mutual fund switches that resulted in $175,000 in unnecessary charges to the investor, earning the broker $116,000. Firms should monitor these trades since there is a financial incentive for brokers to recommend an investment strategy.
NYLife Securities allegedly also failed to oversee cross-product switches—for example, switching a mutual fund for a potentially unsuitable insurance product.
As a result of the AWC, NYLife Securities consented to pay a $200,000 fine as well as a restitution fee of $63,347. They also agreed to update their field supervision guide relating to the firm’s mutual fund and cross-product switching.
Read a copy of the AWC here.
High-Risk Mutual Funds
FINRA alleged in an Acceptance, Waiver, and Consent agreement dated November 20, 2019, that NYLife Securities did not adequately supervise a broker’s sales of high-risk, volatile mutual funds.
NYLife Securities had a system in place to limit investors’ high-risk investments. The firm flagged risky investments if the customers specified conservative risk tolerance. FINRA alleged, however, that the firm adjusted investors’ risk tolerance to allow for the sale of riskier products without seeking the investor’s input.
As a result, a broker was allegedly able to solicit 48 customers for investments in high-risk mutual funds that focused on energy investments. Energy investments are always especially volatile. This concentration in higher-risk products allegedly led to collective losses of $1.4 million following a decline in oil prices.
- After investors complained, NYLife Securities made restitution payments of $1.1 million.
- As part of the terms of the AWC, NYLife Securities consented to a fine of $250,000.
Read a copy of the AWC here.
Failure to Monitor Broker Emails
An NYLife Securities broker named John Mosley (CRD #: 817095) allegedly used his NYLife Securities email to confess to stealing from his fraternal organization. He served as the treasurer and allegedly stole from the organization by writing checks to himself. The emails allegedly contained phrases such as “assuming liability, “misled,” “search warrant,” and “police.”
These are all terms that should have automatically flagged the broker’s emails for review. Firms regularly flag emails for review that contain specified phrases, including those listed above.
The State of Maine fined NYLife Securities $50,000.
This disclosure appears in the Detailed Report.
Kurta Law Can Help
Our securities attorneys have experience recovering losses from NYLife Securities. If you suspect your NYLife Securities broker may have engaged in misconduct, contact us for a free case evaluation. Often firms require investors to settle their dispute through FINRA arbitration instead of suing in a civil court. We can help you recover your losses as efficiently as possible.