MML Investors Services Complaints & Regulatory Actions

MML Investors Services, LLC (“MML Investors”) (CRD# 10409) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated MML Investors, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against MML Investors, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue MML Investors Services, LLC?

If you’ve lost money caused by MML Investors and/or its employees’ misconduct then the answer is, YES,  you can sue MML Investors but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.  Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue MML Investors in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against MML Investors is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is MML Investors Services, LLC?

MML Investors (CRD# 10409) was first registered as a securities broker-dealer in 1982 with the SEC and FINRA.  Since then, there have been several name changes and restructuring of the company, which is now controlled by MassMutual Life Insurance Company and headquartered in Springfield, Massachusetts with branch offices throughout the United States Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person life insurance agent and securities registered representative offices supervised remotely. Today there are over 1500 MML Investors branch offices with over 8500 registered representatives in every state.  It is now one of the largest broker-dealer and investment advisory firms in the United States.

MML Investors Services, LLC Has Many Different Regulatory Problems 

MML Investors’ rapid growth has not been without consequences. There have been approximately 8 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against MML Investors for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. MML Investors is a repeat offender: there are over 9 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another.

A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS MML INVESTORS SERVICES, LLC HAS FACED OVER THE YEARS*

MML Investors has been repeatedly censured, warned, and fined over $1 million for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

FINRA Sanctions MML Investors For Not Safeguarding Confidential Customer Information

A recent FINRA investigation revealed that MML Investors failed to prevent certain registered and associated persons who had been terminated from the Firm from continuing to access customer records and information, including nonpublic personal information, in violation of the SEC’s Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information (“Regulation S-P”) and FINRA Rule 2010.  MML Investors was censured and fined $75,000 for not safeguarding the confidential customer information. 

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FINRA Sanctions MML Investors For Not Preserving Electronic Brokerage Records

FINRA investigated and discovered MML Investors failed to maintain approximately 2,400,000 electronic brokerage records in non-erasable and non-rewritable format, known as WORM format, as required by Section 17(a) of the Exchange Act of 1934 (the “Exchange Act”), Rule 17a-4(f) promulgated thereunder, NASD Rule 3110 and FINRA Rule 4511. WORM stands for “write once, read many,” and is intended to prevent the alteration or destruction of broker-dealer records stored electronically. During the relevant period, the MML Investors also experienced related notice, audit and attestation deficiencies affecting the ability to adequately retain and preserve electronic records, in violation of Exchange Act Rule 17a-4(f), NASD Rules 3110 and FINRA Rule 4511. Finally, the Firms failed to enforce written supervisory procedures relating to compliance with the WORM requirement, in violation of NASD Rule 3010(b) and FINRA Rule 3110(b).  As a result, FINRA censured and fined MML Investors $750,000. 

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FINRA Sanctions MML Investors For Cheating Charities Making Mutual Fund Investments

During one of FINRAs investigations of MML Investors it discovered that the brokerage firm disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (“Eligible Customers”). These Eligible Customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.  The reason, according to FINRA, was MML Investors failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customers who purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, FINRA concluded MML Investors violated NASD Conduct Rule 3010, FINRA Rule 3110, and FINRA Rule 2010, censured the broker-dealer and ordered a remediation and compensation to Eligible Customers who were qualified, but did not receive mutual fund sales charge waivers. 

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FINRA Sanctions MML Investors For Not Amending Stockbroker Records

MML Investors failed to file timely Forms U5 and amendments to Forms U4 and U5. The firm also failed to establish and maintain a supervisory system and establish, maintain and enforce written supervisory procedures that were reasonably designed to achieve compliance with the reporting requirements Rules 3010 and 2110 and FINRA Rule 2010 for which FINRA censured and fined the firm $300,000.  

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FINRA Sanctions MML Investors For Unapproved Private Securities Transactions

FINRA investigated and discovered that MML Investors violated NASD Rules 3010(a) and 2110 by failing to reasonably supervise its registered representatives in connection with their unapproved sale of certain private securities. The broker-dealer’s written supervisory procedures (“WSPs”) stated that its financial advisors were prohibited from participating in private securities transactions without the prior written approval of the Chief Compliance Officer or his or her delegate. Despite this prohibition, and numerous red flags described below indicating that the broker-dealers registered representatives were engaged in selling away, MML Investors did not reasonably monitor for or review these indications to determine whether unapproved private securities transactions were occurring at MML Investors. As a result of the MML Investors’ supervisory failures, certain financial advisors at one branch office located in Utah recommended unapproved promissory notes to investors to investors who sustained losses of up to $760,000 when the issuers of these promissory notes discontinued interest payments. The issuer of these unapproved promissory notes was was later determined to be engaged in a multimillion dollar Ponzi scheme.  FINRA censured and fined MML Investors $175,000, ordered restitution in the amount of $760,000. 

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FINRA Sanctions MML Investors For Mutual Fund Sales Abuse

During one of FINRAs investigations, it discovered that MML Investors registered representatives had made thousands of unsuitable recommendations of Class B shares of mutual funds and that the firm had no supervisory procedures in place to make sure that clients received the opportunity to purchase Class A shares of mutual funds at net asset value and avoid sales charges.  Specifically, FINRA found MML Investors effected transactions where it made recommendations to clients to purchase Class B shares through its registered representatives. In connection with its recommendations, MML Investors did not consider on a consistent basis, that an equal investment in Class A shares would generally have been more advantageous for certain clients. Accordingly, MML Investors will undertake a remediation plan that includes more than 5,200 transactions involving at least 447 client households for which it was censured and fined $473,000 and ordered to compensate investors in connection with the 5,200 transactions. 

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Why Does MML Investors Services, LLC Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did MML Investors Services, LLC Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. MML Investors is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting MML Investors without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By MML Investors Services, LLC Today!

The securities attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with MML Investors cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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