BBVA Securities Inc has agreed to pay a fine of $150,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From at least March 2019 to August 2021, BBVA failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to monitor rates of deferred variable annuity (VA) exchanges.
When supervising VA exchanges, the firm relied on transaction-by- transaction approvals from regional supervisors, along with periodic reports of each representative’s exchange activity. The periodic reports only included information regarding a single month’s exchange transactions and did not include the representative’s rate of exchange.
The firm had no report, alert, or other system or review that surveilled for representatives’ VA exchange rates.
Additionally, BBVA’s WSPs did not provide for the assessment of representatives’ rates of deferred VA exchanges or provide guidance as to what exchange rate or other characteristics would indicate a pattern necessitating further review.
By failing to establish and maintain a supervisory system, including WSPs, reasonably designed to monitor rates of deferred VA exchanges, Respondent violated FINRA Rules 3110, 2330, and 2010.
On top of the fine, the firm has agreed to a censure.
