Sigma Financial Busted for Overcharging Customers on Unit Investment Trusts (UITs)


Sigma Financial joined a long line of brokerage firms that have gotten in trouble for overcharging customers recently, settling allegations brought by the Financial Industry Regulatory Authority (FINRA) for approximately $200,000 in fines and restitution.

According to Sigma’s settlement agreement with FINRA, Sigma failed to apply sales charge discounts to customers who purchased Unit Investment Trusts (UITs). There are a variety of investments, like UITs, which offer volume discounts to investors. Failure to pass these discounts on to investors is an increasingly common problem in the brokerage industry.

This is money that an investor might not miss! There is no deduction from the brokerage account other than the expected commissions and sales charges, and it is a scrupulous investor indeed who double checks his commission charges!

Incidentally, UITs may not be great investments for most retirement strategies, and investors should carefully consider other options before purchasing UITs. UITs do have that one feature that ensures financial advisors will recommend them—high commissions! A UIT is essentially a “basket” of securities—which may be bonds or other income producing securities—which are all bundled together, but not actively managed. There are usually better ways to fill the income portion of a retirement portfolio.

If you have questions about investment losses, the securities litigation attorneys at Investor Defense Law LLP may be able to help, and offer free consultations.

Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington State recover investment losses. We understand investment fraud and know how to sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud attorney at 800.487.4660.

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