Founded in 1999, Park Avenue Securities (“PAS”) is a broker-dealer with $10.6B in assets under management (AUM) as of December 14, 2022. Headquartered in New York, New York, PAS is a wholly-owned subsidiary of The Guardian Life Insurance Company of America, which has been around since 1860. The firm employs 1,697 people and services 54,606 clients (mostly individuals). Its brokers are licensed in all 50 states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Financial Misconduct at Park Avenue Securities
PAS 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.
PAS and brokers backed by PAS have a long history of misconduct. Per FINRA’s BrokerCheck report, the firm has 21 disclosures (18 regulatory events and 3 arbitrations) as recently as August 2022.
Sadly, PAS has a history of overcharging customers. In July 2019, FINRA initiated a claim against PAS, finding that the firm disadvantaged some retirement plan and charitable organization customers who were eligible to purchase Class A shares in specific mutual funds without a front-end sales charge. However, these customers were instead sold Class A shares with a front-end sales charge or Class B or C shares, which had back-end sales charges as well as higher ongoing fees and expenses.
PAS lacked adequate written supervisory procedures and failed to reasonably supervise its financial advisors, instead relying on them to determine whether a sales-charge waiver applied. As a result, it was estimated that since January 1, 2011, clients were overcharged approximately $560,170 for mutual fund purchases. PAS paid $640,552 in restitution (the amount overcharged plus interest).
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