The Financial Industry Regulatory Authority has filed a regulatory complaint against two former MetLife Securities Inc. brokers for allegedly engaging in a seven-year scheme to inflate commissions by encouraging customers to switch $21 million in annuities, Reuters reports.
According to the FINRA complaint, Christopher Birli and Patrick Chapin, who were both employees of MetLife in Williamsville, New York, focused their efforts on advising employees of the State University of New York who participated in its retirement plan. FINRA alleges that between 2004 and 2007, Birli and Chapin recommended to 45 of their customers that they switch the MetLife variable annuities held in their retirement accounts for new variable annuities held in individual retirement accounts outside of the university plan, Reuters reports.
The pair carefully structured these deals in order to circumvent one of MetLife’s policies that prohibits exchanging the two types of variable annuities. According to FINRA, this was done by advising clients to first cash in their retirement plan annuities and then purchase a different security within the plan to hold for 90 days. Clients were subsequently instructed to sell that security in order to buy a variable annuity through an IRA.