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Next Financial Fined for Unit Investment Trusts

Next FinancialAccording to records provided by the Financial Industry Regulatory Authority (FINRA), Texas-based brokerage and advisory firm Next Financial has submitted a letter of Acceptance, Waiver and Consent (AWC Letter) to settle allegations of misconduct. The securities and investment fraud law firm Fitapelli Kurta is interested in hearing from investors who have complaints regarding Next Financial (CRD# 46214).

Formed in Virginia in 1998, Next Financial is headquartered in Houston, Texas and registered with 53 US states and territories. Barry Knight is President and Chief Executive Officer; Leslie Jallans is Chief Compliance Officer; Philip Smith is Chief Financial Officer and Financial Operations Principal; Christopher Mueller is Senior Vice President and Chief Operations Officer.

According to the firm’s BrokerCheck report, Next Financial is the subject of sixteen regulatory sanctions and three customer complaints that evolved into arbitration.

In January 2016 FINRA fined and sanctioned Next Financial following allegations the firm failed to identify and institute sales charge discounts for eligible Unit Investment Trust (UIT) purchases, ultimately resulting in excessive sales charges of approximately $192,089. Specifically, according to FINRA’s complaint, Next Financial “failed to apply sales charge discounts to 696 eligible UIT purchases.” FINRA additionally alleges that Next Financial “failed to establish, maintain and enforce a supervisory system and written supervisory procedures… reasonably designed to ensure customers received sales charge discounts on all eligible UIT purchases.” Next Financial has signed an AWC Letter consenting to a censure, a fine of $125,000, and restitution totaling $216,150.04 to the affected customers.

According to FINRA A Unit Investment Trust (UIT) is an investment vehicle that issues securities which represent “undivided interests in a relatively fixed portfolio of assets.”. Portfolios of UITs are typically assembled by a sponsor, deposited into a trust, and sold as units in a public offering. They are redeemable securities that entitle an investor to receive a proportionate share of the net assets when the UIT is redeemed or terminated. These sponsors provide numerous ways to reduce sales fees, including breakpoints — which reduce fees by increasing the size of an investment — as well as fee reductions on rollovers and exchanges.

If you have complaints regarding or have lost money investing with Next Financial or in Unit Investment Trusts, you may be entitled to recover your losses. Call the securities and investment fraud law firm Fitapelli Kurta at 877-238-4175 for a free consultation. Fitapelli Kurta takes every case on a contingency basis, which means we only get paid if and when you collect money. By law there may be a limited window to file your claim, so we recommend you avoid delay. Call 877-238-4175 now to speak to an attorney for free.