FINRA Files a Complaint against Peter Michael Terlecky III for Improper Variable Annuity Sales

Peter Michael Terlecky III, of Grand Island, New York, was named a respondent in a FINRA complaint alleging that he circumvented his member firm’s supervisory and compliance procedures by concealing and failing to process variable annuity purchase transactions totaling approximately $2.3 million as annuity replacement trades, even though each purchase was funded by the sale of a fixed or variable annuity. Mr. Terlecky was registered with Princor Financial Services from 1992 through August 2011 and is currently registered with MML Investors Services, LLC.  The complaint alleges that Terlecky concealed the variable annuity replacements from his firm’s supervisory review by structuring them as separate trades through a two-step process, rather than through annuity exchanges. Terlecky accomplished this by transferring the sale proceeds from the replaced annuity to a firm brokerage (money market) account and then, after waiting a short period, usually seven days or less, used the funds in the brokerage account to purchase the new variable annuity. Terlecky prepared and submitted new account forms and annuity documents to the firm for each of the variable annuity replacements containing numerous misrepresentations and items of false information that further disguised the true nature of these transactions. Terlecky earned greater commissions and avoided supervisory scrutiny by circumventing firm procedures and concealing the annuity replacements. Conversely, the customers allegedly suffered harm as a result of this misconduct by, among other things, being deprived of receiving firm-mandated disclosures of material facts regarding annuity replacements and the opportunity of performing a meaningful comparison between the annuities they were selling and those they were considering for purchase, and, in some instances, unnecessarily incurring new seven year surrender periods with their replacement variable annuities. (FINRA Case #2011029089201)

Investors who have suffered losses through the sale of variable annuities and non-traded REITsmay be able recover their losses through arbitration. The attorneys at Silver Law Group are experienced in representing investors in cases against brokerage firms for violations of the sales of these complex or high commission products.   We primarily represent investors on a contingent fee basis and, in most cases, we will agree to advance any costs.