Former Signator Investors Advisor, Alfred Kai Kwong Chan, has accepted a suspension and fine from FINRA relating to allegations that he improperly sold indexed annuities through an outside business activity and that he improperly distributed a newspaper advertisement without proper risk disclosures regarding a non-traded REIT marketed to customers.
Chan agreed to a six-month suspension from the securities industry and to pay a $10,000 fine.
According to Chan’s Letter of Acceptance, Waiver, and Consent (“AWC”), No. 2013039301501, FINRA alleged that during the period between April 1, 2011 and September 30, 2013, Mr. Chan sold 105 indexed annuities with an approximate value of $2.5 million through an insurance agency but failed to disclose the sales to Signator Investors, in violation of FINRA Rules 3270 and 2010.
Additionally, FINRA noted in the AWC that Mr. Chan also conducted two seminars concerning a non-traded REIT and that he distributed a newspaper advertisement that was not approved by Signator and that lacked adequate risk disclosure. FINRA noted that approximately 40 people were in attendance at the seminars. FINRA alleged that distribution of the advertisement highlighting positive attributes of a non-traded REIT without addressing the risks of the product constitutes a violation NASD Rule 2210 and FINRA Rule 2010.
A review of Mr. Chan’s BrokerCheck report reveals that he has been the subject of 2 customer complaints. Both customer complaints allege that Mr. Chan sold them annuities that they did not need and were charged surrender fees on annuities that were terminated.
Mr. Chan worked for Signator from December 2010 through November 2013. According to BrokerCheck, Mr. Chan was terminated from Signator in November 2013 for failing “to follow firm procedures regarding the sale of unapproved indexed annuities, the use of unapproved sales and advertising material, as well as unapproved seminar activity.” Following his discharge from Signator, Mr. Chan worked for NI Advisors from December 2013 to January 2016. According to the AWC, Mr. Chan is not working with any firm at this time.