James Anderson (CRD# 4803514) is a now-barred broker formerly with Ameritas Investment Corp. (CRD# 14869. Anderson was a registered representative of Ameritas from 2004 to February, 2019, and has worked at their branch offices in Dakota Dunes, South Dakota, West Des Moines, Iowa, and Lincoln, Nebraska. Anderson also did business as Central Financial Group.
James Anderson Barred For Not Cooperating With Selling Away Investigation
FINRA barred James Anderson from working in the securities industry after he failed to provide FINRA with documents and information during an investigation into allegations that he “engaged in the purchase and sale of securities away from his member firm, without the knowledge or approval of the firm.”
That situation is frequently called selling away, and it describes a broker selling products that are not approved by the firm. These unapproved products have not been subject to the due diligence and risk review that products on the approved product list have.
Selling away is sometimes related to a broker’s outside business activity, and can involve significant risk for the investor. Selling away schemes often involve a broker selling promissory notes to a client, which is like a loan to the broker. Investors may not ever be paid back according to the terms of the promissory note.
Under FINRA rules, broker-dealers are required to supervise their registered representatives (brokers) to protect clients from non-approved investments. Selling away can occur when broker-dealers don’t have the proper oversight of their representatives.
FINRA Regulatory Actions And Customer Disputes Involving James Anderson Or Capital Financial Group
Anderson is the subject of 5 disclosures on his publicly-available FINRA BrokerCheck report, most of which are related to allegations of selling away.
The first disclosure on James Anderson’s BrokerCheck report is a regulatory event from 2013. Initiated by FINRA, it states “Mr. Anderson was found to have sold Indexed Annuities that were not listed on the Firm’s approved list. The transactions equaled to an undisclosed outside business activity.”
The next disclosure, in February, 2019, is an “Employment Separation After Allegations”, which shows that Anderson was discharged from Ameritas Investment Corp. after the conclusion of an internal investigation found that he sold indexed annuities and promissory notes away from the firm.
After being fired from Ameritas, Anderson has had two customer disputes brought against him.
The first customer dispute, brought in April, 2019, alleges that Anderson made “unsuitable recommendation to purchase promissory note (selling away).” The customer is asking for $400,000 in damages. The claim is pending.
In August, 2019, a FINRA arbitration was initiated, in which the customer alleged “failure to supervise and negligent misrepresentation in the sale of an unregistered security.” That dispute requests $2,423,000 in damages, and is still pending.
The other disclosure on Anderson’s report is the regulatory event initiated by FINRA in June, 2019, permanently bars him in all capacities. Anderson consented to the sanction and entry of findings that he didn’t comply with FINRA’s request for information without admitting or denying the findings. The resolution is listed as acceptance, waiver, and consent (AWC).
Investors often don’t know their broker involved them in selling away until the broker is fired, or the scheme gets publicity.
About Indexed Annuities
Indexed annuties, or equity-indexed annuities, are tax-deferred annuities with interest linked to an index such as the S&P 500. Indexed annuities guarantee a minimum return if the product is held to the full term and protects the principal. The way the interest is calculated is often complex and depends on many factors. Indexed annuities offer returns greater than a CD, but less than the market.
The sales pitch given to investors is that an indexed annuity can give them tax-deferred growth while still being tied to the upside of the market. However, many investors don’t realize that they are charged substantial fees to pay for protecting their principal, or that they will have a surrender charge for early withdrawal.
Elderly investors are often sold indexed annuities because they are seeking income and preservation of principal. FINRA issued an investor alert regarding the potential for elder financial fraud involving indexed annuities, and encourages investors to understand the complex nature of this investment.
The employment history section of James Anderson’s BrokerCheck report states that he’s been employed by Aviva USA Corporation since 2004. That company is involved in selling insurance and annuity products. He’s also been employed by Central Financial Group, an insurance company, since 2008.
It’s not known if those are the companies from which Anderson sold the indexed annuities or engaged in selling away, but as a registered representative of Ameritas, they are responsible for him, and losses suffered by investors may be recovered from the firm through FINRA arbitration.
Did You Invest With James Anderson or Ameritas Investment Corp.?
If you have losses with James Anderson or Ameritas Investment Corp., we’d like to hear from you. It may be possible to recover your losses through FINRA arbitration.
Silver Law Group represents investors in securities and investment fraud cases, including cases of selling away, churning, and unsuitability. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct.
If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us unless we recover money for you. Contact us today and let us know how we can help.