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Park Avenue Securities: Regulatory Actions Overview 

Park Avenue Securities Overview featured by top securities fraud attorneys, the White Law Group

The White Law Group reviews the regulatory history of Park Avenue Securities LLC.  

Park Avenue Securities LLC (CRD#: 46173/SEC#: 801-58108,8-51324), a dual registered independent broker-dealer and investment advisory firm, is headquartered in New York, NY. The firm reportedly had $318 million in revenue in 2022 and manages $10 billion.  

The firm reportedly has 22 disclosure events on its broker record including 19 regulatory events and 3 arbitrations.  

FINRA and the SEC (Securities and Exchange Commission) may impose regulatory actions against a broker-dealer such as censures, fines, suspensions and restitution, among others. Regulatory actions can have serious consequences for a broker-dealer’s profile and reputation. FINRA BrokerCheck may also report arbitration awards related to customer disputes. These awards typically indicate the outcome of arbitration proceedings, which could result in financial compensation for unhappy customers. The presence of multiple arbitration awards against a broker or firm can indicate a history of unresolved customer complaints or poor conduct.    

The following is a brief breakdown of publicly available information regarding Park Avenue Securities and its securities sales practices and FINRA regulatory history. FINRA is the self-regulator that oversees brokers and brokerage firms.  To learn more about the firm’s history please see Park Avenue Securities full CRD, or to learn more about your individual broker, you can visit FINRA BrokerCheck.

Park Avenue Securities Regulatory History 

June 5, 2023: Last week, FINRA has reportedly censured and fined Park Avenue Securities $30,000 for supervisory failures. From December 2014 through April 2018, the firm reportedly failed to reasonably supervise a representative who engaged in an undisclosed outside business activity involving the operation of a medical cannabis business and allegedly participated in undisclosed private securities transactions in connection with the company. The firm reportedly failed to investigate red flags that the advisor was engaged in an undisclosed outside business activity and unapproved private securities transactions, in violation of FINRA Rules 3110 and 2010. To learn more, please see: “Selling Away”

July 2019: FINRA reportedly censured Park Avenue Securities and requested the firm provide remediation to eligible customers who qualified for, but did not receive, applicable mutual fund sales charge waivers in the amount of $640,552, according to an AWC. The firm reportedly agreed to the sanctions that it disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge.

Failure to Supervise Variable Annuity Sales

April 2018: FINRA reportedly fined Park Avenue Securities $300,000 over problems in its supervision of variable annuity sales. Park Avenue allegedly failed to establish, maintain and enforce a supervisory system concerning multi-share class variable annuities. 

The firm purportedly sold 12,732 variable annuity contracts between 2013 and 2015.  Almost 2,600, or roughly 20%, were L-share contracts that had shorter surrender periods and carried fees typically between 35 and 50 basis points higher annually than those of the most sold B-share contracts. Park Avenue also allegedly failed to provide training to its brokers on the features of the various share classes.   

October 2015: FINRA censured and fined Park Avenue Securities  $300,000.00  for allegations that the firm overcharged investors on unit investment trusts (UITs). According to the AWC, Park Avenue Securities failed to identify and properly apply unit investment trust sales charge discounts. The firm failed to recognize two thousand seven hundred fifteen purchases of unit investment trusts had been eligible for discounts. FINRA found that approximately $443,255.07 in excess charges had been paid by customers, a violation of FINRA Rule 2010. 

Failure to Supervise Alleged Ponzi Scheme

March 2012: Park Avenue Securities LLC was censured and fined $175,000. FINRA found that the firm allegedly failed to investigate its representatives’ involvement in a Ponzi scheme and of allegations two registered representatives made. 

Park Avenue Securities became aware that two of its representatives had participated in unapproved private securities transactions by facilitating investments in the Ponzi scheme for themselves and some firm customers. FINRA found that Park Avenue Securities took inadequate steps to investigate the allegations. 

Park Avenue Securities Broker Misconduct and Customer Complaints       

There have been several cases of registered representatives employed by Park Avenue Securities who were allegedly involved in broker misconduct and fraudulent activities.  Broker dealers are required to supervise their employees. If they fail to do so they may be held liable through a FINRA arbitration claim.   

March 2022: a Park Avenue Securities broker in La Jolla, California was barred by FINRA after allegations that he submitted multiple life insurance applications for a customer, worth $23,950,000, and submitted applications for multiple loans on the policies, totaling approximately $1,000,000. FINRA found that when questioned by his member firm about the customer’s policies and loans, the broker submitted two letters regarding the customer’s reasons for taking out the policies and loans, one purportedly from the customer’s estate attorney and the other purportedly from the customer’s accountant. The broker allegedly falsified both letters prior to submitting them to the firm, according to FINRA. The Guardian Life Insurance co, an affiliate of Park Avenue Securities, reportedly fired the broker in 2020 after it “identified a pattern of unauthorized transactions and signature irregularities relating to traditional fixed life insurance products.” 

June 2021: FINRA barred financial advisor Nicholas R. Palumbo (CRD#: 1069948) from working in the securities industry after he refused to produce information and documents requested by FINRA in connection with an alleged private securities transaction. FINRA was also investigating his potential involvement with Outside Business Activities (OBAs). According to his FINRA broker report, Palumbo left Park Avenue Securities in May 2020, when he “was permitted to resign while under investigation for failure to disclose an unapproved private securities transaction and soliciting clients to invest in same.”   

June 2021: Another Park Avenue broker, Robert Lax (CRD #1985758), was reportedly barred for allegations of Outside Business Activities. from associating with any FINRA member at any time.  Lax reportedly refused to provide information and documents requested by FINRA regarding his outside business activities, according to a Letter of Acceptance Waiver and Consent.   

FINRA Supervision Rules 

All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.  Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.  

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.  

If your broker has defrauded you, you may be able to file a FINRA claim against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.               

Potential Lawsuits to Recover Investment Losses    

If you have any questions about investments you made with Park Avenue Securities or if you believe that you have been the victim of securities fraud, The White Law Group may be able to help.  To contact the firm, please call 888-637-5510         

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.               

Free Consultation with Securities Attorneys

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.                

With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.                

Although our offices are in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit https://whitesecuritieslaw.com.        







Tags: , , , , Last modified: February 14, 2024