Franc Cuenca Terminated For Failing To Follow Policy In Connection With Variable Annuity Transactions
The Wolper Law Firm is currently investigating claims against Frank Cuenca, a former Financial Advisor with SII Investments in San Ramon, California, who is now registered with International Assets Advisor. Frank Cuenca has been in the securities industry since the 1990s and previously worked for Securities Service Network and FSC Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on December 7, 2017, Franc Cuenca was discharged by SII Investments after it was alleged that he “failed to follow firm procedures for submission of variable annuity transactions, failed to timely submit a customer complaint, and used unapproved email.”
A variable annuity is complex hybrid financial and insurance product that offers investors a stream of income, tax deferment and a death benefit. The sub-accounts of an annuity are generally invested in mutual funds, the selection of which will dictate the potential performance of the annuity. While there are benefits of variable annuities, they are often outweighed by the risks and other features.
For example, variable annuities may include high annual management fees, surrender charges, lock-up periods, and mortality charges. In addition, it is commonly misunderstood that variable annuities offer guaranteed investment returns. They do not. Many financial advisors fail to disclose that investment returns may be impacted by market conditions.
Many financial advisors recommend annuities because they generate high sales commissions relative to other financial products. Unscrupulous financial advisors may also engage in annuity “switching,” which refers to the practice of selling one annuity and purchasing another. Often times the “switch” is justified by the financial advisor by suggesting that the annuity purchased has superior features when any such enhanced feature is actually outweighed by the cost of the “switch.”
The Securities Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have cautioned customers to be aware of “bonus credits” offered to financial advisors for selling certain variable annuity products.
Frank Cuenca also has a documented history of customer complaints, including the following:
- March 2009—“Client alleges that Mr. Cuenca was negligent in failing to act on her instructions to liquidate her accounts and move her funds to money market.”
- December 2008—“Client alleges that liquidations took place without prior authorization.”
- September 2002—Client “alleges unsuitable and unauthorized investments in mutual funds.”
- March 2001—“Clients allege that representative did not diversify investments as had been discussed and agreed upon.”
- August 2000—Client “alleges that trades…were not made with client’s full consent…”
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. In addition, Financial Advisors must first obtain authorization from their customers before placing trades in a customer account. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
If you or someone you know was a customer of Frank Cuenca, and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at email@example.com to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. Simply put, he knows how the other side evaluates cases, which gives you a competitive advantage.