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Christopher Herrmann: FINRA Suspends Plainfield Financial Advisor
A disciplinary action taken by the Financial Industry Regulatory Authority against Plainfield, Indiana investment advisor Christopher Herrmann (CRD# 4123657) suspended him over allegations he recommended unsuitable annuity transactions to retired and elderly customers. A representative of Legacy Wealth Management, Herrmann was suspended for five months and fined $7,500.
According to a Letter of Acceptance, Waiver and Consent (No. 2016051817601) dated October 2018, Christopher Herrmann was associated with Key Investment Services when, in September 2013 and October 2014, he recommended annuity to transactions to customers, but failed to facilitate them as tax-free 1035 exchanges, resulting in “significant tax liabilities.” In the September 2013 transaction, according to FINRA, he recommended that a retired and elderly customer liquidate two fixed annuities and use the proceeds to purchase a variable annuity; in the October 2014 transaction, he recommended that a retired and elderly customer liquidate a variable annuity and use the proceeds to purchase a fixed annuity. Both customers followed the recommendations, FINRA states, and the liquidations constituted “taxable events that resulted in negative tax consequences” for both customers—consequences “that would not have occurred” had Herrmann recommended they purchase the new annuities as “tax-free 1035 exchanges.” FINRA states that he was aware the recommendations would result in tax consequences and that he could facilitate them as tax-free transactions, but still did not do so. His failure to take into account the customers’ tax statuses and the tax consequences of his recommendations, according to FINRA, made his recommendations unsuitable for the customers in question. As a result of the foregoing alleged conduct, Christopher Herrmann was suspended from association with any FINRA member in any capacity for nine months. He was also ordered to pay a fine of $10,000.
Christopher Herrmann’s disclosure records also list six customer complaints that reached settlement. A 2016 complaint, for instance, alleged that as a representative of Key Investment Services, he made misrepresentations regarding a mutual fund switch; the complaint reached a settlement of $3,105. A 2008 complaint alleged that as a representative of Morgan Keegan & Company, he misrepresented the risk of an investment; the complaint reached a settlement of $12,018.20. A 2009 complaint alleged that as a representative of Morgan Keegan & Company, he misrepresented and recommended unsuitable mutual funds; the complaint reached a settlement of $210,000. And a 2007 complaint alleged that as a representative of Morgan Keegan, he recommended unsuitable investments, misrepresented material facts, and breached his fiduciary duty regarding a mutual fund purchase; the complaint reached a settlement of $72,000.
Christopher Herrmann has been registered as an investment advisor with Legacy Wealth Management in Plainfield, Indiana since 2016. His employment history includes Key Investment Services in Greenwood, Indiana; David A. Noyes & Company in Indianapolis, Indiana; Morgan Keegan & Company in Indianapolis, Indiana; PFIC Securities Corporation in Franklin, Tennessee; Merrill Lynch in New York, New York; Northwestern Mutual Investment Services in Milwaukee, Wisconsin; and Robert W. Baird & Company in Milwaukee, Wisconsin. His FINRA BrokerCheck report lists zero state licenses and five securities industry qualification examinations.