Founded in 1968, Northwestern Mutual Investment Services (“NMIS”) is a broker-dealer and registered investment adviser serving the investment planning and product needs of individuals and businesses. Headquartered in Milwaukee, Wisconsin, NMIS is a wholly owned company offering investment services in 60+ cities nationwide. The firm’s client investable assets total $29B+. As of March 30, 2022, the firm had 2,216 registered representatives. Its brokers are licensed in all 50 states as well as the District of Columbia.
Financial Misconduct at Northwestern Mutual Investment Services
NMIS is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
NMIS and brokers backed by NMIS have a history of misconduct.
In April 2020, FINRA initiated a claim against NMIS, alleging that between 2005 and 2017, the firm failed to establish, maintain, and enforce a supervisory system that was reasonably designed to review and monitor the transmittals of funds from the accounts of customers to third party accounts and outside entities in violation of applicable rules.
A registered representative converted $473,496 from his customers’ variable annuities through distributions and transfers to his personal bank account. In order to convert these funds, he forged their signatures. NMIS failed to make sure that the clients were the ones who had effected the transfers. Additionally, the representative effected unauthorized transfers of funds totaling $121,123 from two customers’ variable annuities to another customer’s bank account for the purpose of concealing the missing money that he had previously converted. As a result, NMIS was censured and fined $350,000.
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