Home Alts News Massachusetts Fines MassMutual Subsidiary $250,000 for Failing to Supervise Broker

Massachusetts Fines MassMutual Subsidiary $250,000 for Failing to Supervise Broker

The Massachusetts Securities Division has levied a $250,000 fine against MLS Investment Services LLC, a subsidiary of MassMutual, over the company’s failure to supervise a broker accused of defrauding his clients

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The Massachusetts Securities Division has levied a $250,000 fine against MLS Investment Services LLC, a subsidiary of MassMutual, over the company’s failure to supervise a broker accused of defrauding his clients. The regulator claims that Charles J. Evan pressured his clients into “unsuitable high-commission insurance products in order to line his own pockets.”

As part of a consent order, MLS Investment Services agreed to pay the fine and disgorge any profits related to Evan’s “unlawful actions,” and to conduct an internal review of its supervisory procedures.

The Securities Division has also filed a separate complaint against Evan, seeking to ban him permanently from operating in Massachusetts. Evan, who has since been terminated by his employers and FINRA, is alleged to have “aggressively pushed clients into variable annuities, while falsely claiming not to be receiving commissions for the sale of those products.”

“Evan perpetrated a deceptively simple scheme for almost 10 years by subjecting his clients to high-pressure boiler room sales tactics and outright fraudulent misstatements, misrepresentations, and omissions while advising those clients to purchase high-commission products intended solely to generate large profits for himself,” the complaint states.

As part of his scheme to drive up commissions for himself, Evan reportedly advised clients to liquidate assets from their retirement accounts in order to fund additional life insurance policy purchases as investment vehicles. In some cases, clients fell behind on payments and were still pressured to contribute additional funds to keep the policies in place, the regulator said.

“Evan repeatedly urged clients to act quickly on purchases by misrepresenting that the products he offered were the result of special deals that were only available for a short time, often telling clients that they had as little as 24 hours to decide whether to invest,” the complaint states.

Evan has previously been registered as a broker-dealer agent with Baystate Financial, as well as an investment adviser representative with Baystate Wealth Management and his own company, Capital Planning Group of Massachusetts.

In addition to a permanent ban from operating in Massachusetts, the regulator is also seeking an order to require Evan to pay restitution to compensate affected investors for their losses and to pay an administrative fine.

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