Christine Warner Suspended by FINRA for Alleged Failure to Supervise
Christine Warner (CRD #: 4001584), a broker registered with Monticello Financial Group, has been suspended by FINRA, according to her BrokerCheck record, accessed on January 18, 2023. Keep reading to learn more about her alleged conduct as a broker.
FINRA Suspension
On December 8, 2022, Christine Warner consented to the entry of findings that she allegedly failed to supervise the sales practices of two other brokers between May 2017 and July 2021 while serving as the Chief Compliance Officer of Fortune Financial Services, among other roles.
Alleged Failure to Supervise Representative A
A Letter of Acceptance, Waiver & Consent (AWC) alleges that, during the relevant period, Representative A made unsuitable recommendations to exchange their variable annuities despite the “substantial” surrender charges associated with these exchanges.
Christine Warner allegedly reviewed 41 of these annuity exchange applications but failed to compare the information on these applications with other sources (e.g., clients’ recent account statements) and therefore failed to detect that Representative A understated the clients’ actual surrender charges on 39 of these applications.
She allegedly also failed to evaluate the suitability of these exchanges by failing to determine whether the savings of adopting a new annuity would exceed the charges incurred by surrendering the existing annuity.
The AWC alleges that, in total, these 39 annuity exchanges incurred $227,584.13 in surrender charges for 33 clients.
Christine Warner allegedly also failed to reasonably investigate signs of excessive variable annuity switching. In September 2018, a variable annuity issuer notified her that they had terminated their relationship with Representative A due to his alleged recommendation of the early liquidation of 23 variable annuities. Christine Warner allegedly continued to approve annuity exchanges recommended by Representative A to 11 of the same clients, all incurring additional surrender fees.
Alleged Failure to Supervise Representative B
From September 2017 through November 2020, Representative B and his support staff allegedly used outside email addresses to communicate with firm clients, forwarding new account applications and forms for variable annuity exchanges and withdrawals. These forms were allegedly frequently blank or incomplete, and Representative B would allegedly fill out pre-signed documents.
These outside email addresses were allegedly disclosed to the firm in October 2017. Christine Warner allegedly failed to review and retain these business-related emails, and allegedly also assigned supervisory responsibilities to Representative B in July 2019, despite his being placed on heightened supervision.
The AWC concludes that these allegations constituted violations of FINRA Rules 3110, 2330, and 2010.
FINRA Rule 3110
Failure to supervise violates FINRA Rule 3110, which requires that firms establish systems of supervision to maintain their compliance with securities regulations. Firms must ensure that supervisory personnel have adequate training or experience to perform in their role.
FINRA Rule 2330
FINRA Rule 2330 requires brokers to have a reasonable basis to believe a variable annuity exchange is suitable for the client and requires these transactions to be reviewed and approved by a supervisory principal.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Sanctions
Christine Warner consented to the following sanctions:
- $5,000 fine
- 40 business-day suspension from associating with FINRA members in all principal capacities
Her suspension began on January 3, 2023, and will end on March 1, 2023.
You can read a copy of the AWC here.
Civil Liens
From 2018-2022, Christine Warner was subject to a total of $8,026.76 in civil liens.
Background Information
Christine Warner has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- Series 66 – Uniform Combined State Law Examination
- Series 52TO – Municipal Securities Representative Examination
- Series 99TO – Operations Professional Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 6 – Investment Company Products/Variable Contracts Representative Examination
- Series 14 – Compliance Officer Examination
- Series 53 – Municipal Securities Principal Examination
- Series 4 – Registered Options Principal Examination
- Series 24 – General Securities Principal Examination
- Series 26 – Investment Company Products/Variable Contracts Principal Examination
Christine Warner is a registered broker in New York and Texas.
She has also worked for the following firms:
- Fortune Financial Services (CRD#:42150)
- Ensemble Financial Services (CRD#:17443)
- AXA Advisors (CRD#:6627)
- Mony Securities Corporation (CRD#:4386)
- Manning & Napier Investor Services (CRD#:26266)
Kurta Law Can Help
If you worked with Christine Warner and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.
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