FINRA

Without admitting or denying the findings, Sweeney consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5, and FINRA Rules 2010 and 2020 by making material misrepresentations and omitting to state material information in an unsuitable recommendation to his customer. The findings stated that Sweeney made the material misrepresentations and omitted to state the material information when he made an unsuitable recommendation that caused the customer to surrender two variable annuities and use the proceeds to purchase two new variable annuities. Sweeney, in order to convince the customer to accept his recommendation and in connection with the recommended transactions, he intentionally misrepresented material facts to her. Sweeney represented to her that the new annuities provided her with the same benefits as the original annuities. This representation was false. In addition, Sweeney knew yet intentionally omitted to disclose several material adverse facts to the customer in connection with the recommended transactions. Sweeney did not tell her that she would lose the enhanced living and death benefits to which she was entitled under the original annuities if she surrendered the original annuities, nor did he tell her the value of these enhanced benefits. Nor did Sweeney tell her that she would forfeit the enhanced growth features of the original annuities by switching to the new annuities. Also that the accumulation values for her living and death benefits under her original annuities were higher than the cash surrender values, or that cashing out her original annuities would cause her to realize certain losses based on the performance of her various subaccount investments that she would not otherwise incur. The findings also stated that Sweeney recommended and effected the replacement of the original annuities with the new annuities in the customer's account. Sweeney effected the annuity exchanges without having a reasonable basis to believe that such sales and purchases were suitable for the customer in view of her age, retirement status, financial needs, and her desire to have guaranteed lifetime income streams and enhanced death benefits to pass on to her beneficiaries. Sweeney did not have a reasonable basis to believe that his recommendation was suitable for her because he knew that the new annuities did not provide her with product enhancements or improvements, but rather caused her to forfeit significant benefits and become subject to a new surrender period. The findings also included that Sweeney falsified documents and caused his member firm to create and maintain inaccurate books and records. Sweeney reused original signatures from forms his customers had signed to complete new, separate forms that his customers had not signed, and he then submitted the new forms to his firm as original documents.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All capacities

Indefinite

5/16/2018

Navy Federal Brokerage Services, LLC

Discharged

The Firm has policies and procedures for obtaining customer signatures on account forms. Mr. Sweeney failed to follow these policies and procedures. While the Firm does not believe Mr. Sweeney had any intent to deceive customers, the Firm concluded that Mr. Sweeney's acts warranted termination.