According to the Securities and Exchange Commission (SEC), Prime Capital Services (PCS), a New York-Based Firm, has been charged with luring Florida senior citizens through free-lunch seminars to buy variable annuities which were unsuitable for these individuals. The SEC states that PCS is a registered broker-dealer that is a wholly-owned subsidiary of Gilman Ciocia, Inc. (G & C), which is an income tax preparation business. G & C is headquartered in Poughkeepsi, New York, but also offers its services in Florida and Pennsylvania.
It is said by the SEC that PCS induced these senior citizens to attend seminars and then subsequent private meetings with PCS representatives to sell variable annuities which were unsuitable investments for these investors in consideration of their age, investment objectives, and liquidity. Of course, the sales of these variable annuities were said to have earned millions in commissions for PCS representatives. The representatives mentioned by the SEC are Eric J. Brown, of Highland Beach, Florida, Matthew J. Collins, of Boynton Beach, Florida, Kevin J. Walsh of Viera, Florida, and Mark W. Wells of Boca Raton, Florida.
It is alleged that G&C would arrange the seminars and would invite prospective customers by invitation to free-meal seminars. These seminars were held in Delray Beach, Boynton Beach, Boca Raton, and Melbourne. The PCS representatives would primarily promote variable annuities. Additionally, the representatives would fail to disclose key information about the variable annuity product, including surrender penalties and that the funds were guaranteed at death and that the value could fluctuate until such time.
Furthermore, the SEC’s enforcement action indicates that documents provided to customers were inaccurate and incomplete. It is also alleged by the SEC that documents were altered by PCS representatives to indicate disclosures were made when they, in fact, weren’t.
It is also alleged by the SEC that PCS failed to properly supervise its representatives, failing to detect and prevent violations of Federal securities laws.
The SEC explains that such actions by the PCS are even more egregious because this matter involves senior citizens. Because of their age, these individuals may not be able to recover from investing in unsuitable investments that diminish their retirement savings.
It is critical that investments suit the invidual investment needs of the investor, taking into account their age, financial status, and financial goals. It is unfortunate that often the motivator for investment advisors is the commission on the sale of a product. Therefore, it is important that investors carefully select financial professionals that they can trust and make sure that they do their research on any product, despite the trust they have for their advisor, prior to investing.
If you believe that you are a victim of investment fraud, there may be hope. You may have legal claims which may help you recover from investment losses as a result of inappropriate financial advice. Our firm welcomes calls from anyone who may have questions about their legal rights. Please visit our website at www.dossfirm.com for additional information.
Jason Doss is the owner of The Doss Firm, LLC, an Atlanta-based law firm devoted to representing consumers across the country in a variety of areas including investment disputes and consumer class action litigation. Mr. Doss earned his J.D. from Florida State University in 2002 and his B.A. from the University of Florida in 1997.