FINRA fines Oakland firm Infinity Financial Services $25,000 and orders $25,436 in restitution over failure to supervise variable annuity exchanges

If your advisor moved you out of one variable annuity and into another, and the paperwork said the new contract cost less, FINRA’s latest action against an Oakland brokerage firm is worth a close look. In a Letter of Acceptance, Waiver, and Consent (AWC) accepted on May 5, 2026, Infinity Financial Services (CRD# 144302) was “censured, fined $25,000, ordered to pay restitution of $25,436, and has agreed to an undertaking.” According to the AWC, the firm consented to FINRA’s findings without admitting or denying them. BrokerCheck lists its main office in Oakland, California.

BrokerCheck records show four regulatory events on Infinity’s record, all final, dating back to 2012.

What FINRA found about Infinity’s annuity supervision

The AWC case number is 2020065124802. According to the AWC, “From June 2019 to the present, Infinity failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), reasonably designed to surveil rates of deferred variable annuity exchanges.”

The AWC states that the firm “did not establish or maintain any procedures explaining how to surveil its registered representatives’ deferred variable annuity exchange rates, including who was responsible for such surveillance, how often it would take place, what tools to use to conduct the surveillance, and what parameters to consider when evaluating whether exchange rates were inappropriate.” FINRA also found that “[i]n practice, the firm did not maintain any system for tracking rates of deferred variable annuity exchanges and no review was conducted to monitor registered representatives’ exchange rates.”

The second finding concerns one representative. According to the AWC, between June 2019 and February 2020, “[t]he registered representative recommended 10 deferred variable annuity exchanges to nine of the firm’s customers, and also recommended that two other customers purchase deferred variable annuities, without having a reasonable basis to believe the recommendations were suitable.” FINRA found that the firm’s principals missed red flags, including that the representative “recommended that the customers combine shorter term L-share deferred variable annuities with long-term living benefit riders without assessing or documenting why this combination was suitable.”

The AWC states that “the firm failed to detect that the representative inaccurately stated the costs, fees, and share classes of the proposed annuities. The firm approved the 10 exchanges and two purchase recommendations without identifying these red flags or satisfying its obligations under Rule 2330(c). As a result of the registered representative’s unsuitable recommendations, which Infinity approved, the customers collectively paid $25,436 in additional costs.” FINRA found that Infinity violated Rules 3110, 2330, and 2010. According to the AWC, the representative, who is not named, “consented to an AWC with FINRA” in April 2025 and was suspended for 12 months, fined $10,000, and ordered to pay restitution of $25,436.

According to the AWC, FINRA “imposed a lower fine in this case after it considered, among other things, Infinity’s revenues and financial resources and its agreement to pay restitution.” Under the undertaking, within 180 days a member of senior management who is a registered principal must certify in writing that the firm has remediated the issues in the AWC and implemented a supervisory system reasonably designed to comply with Rule 2330. BrokerCheck answers “No” to whether the order is based on violations of laws that prohibit fraudulent, manipulative, or deceptive conduct, and states that the “FINE PAID IN FULL ON MAY 27, 2026.”

Infinity filed a statement with BrokerCheck. It reads, in part: “THE MATTER REFERENCED IN FINRA MATTER NO. 2020065124802 RELATES TO SUPERVISORY ISSUES INVOLVING DEFERRED VARIABLE ANNUITY EXCHANGE ACTIVITY OCCURRING BETWEEN JUNE 2019 AND FEBRUARY 2020, PRIOR TO THE SEC’S IMPLEMENTATION DATE OF REGULATION BEST INTEREST (REG BI).” The statement adds that “INFINITY FINANCIAL SERVICES HAS ENHANCED ITS SUPERVISORY SYSTEMS, PROCEDURES, AND SURVEILLANCE PROCESSES RELATING TO VARIABLE ANNUITY TRANSACTIONS AND DEFERRED VARIABLE ANNUITY EXCHANGES.”

Infinity’s earlier regulatory record

The 2026 AWC is not Infinity’s first FINRA settlement. BrokerCheck records show that in December 2020, in FINRA case 2016047845201, the firm consented to findings that it “FAILED TO ESTABLISH, MAINTAIN, AND ENFORCE A SUPERVISORY SYSTEM, INCLUDING WSPS, REASONABLY DESIGNED TO ENSURE THAT THE FIRM CONDUCTED REQUIRED BACKGROUND INVESTIGATIONS INTO DISCIPLINARY HISTORIES, FINANCIAL CIRCUMSTANCES, AND QUALIFICATIONS OF ITS NEW HIRES.” According to BrokerCheck, the firm was “CENSURED, FINED $35,000, AND REQUIRED TO FILE A CONTINUING MEMBERSHIP APPLICATION WITH FINRA.”

BrokerCheck also lists two state matters. In 2012, the Alabama Securities Commission entered a consent order over “TWO SECURITIES TRANSACTIONS EFFECTED BY INFINITY FINANCIAL SERVICES ON BEHALF OF ONE ALABAMA CLIENT” while the firm’s Alabama registration was pending. The Ohio Department of Insurance fined the firm $876.21 over an insurance license application question that was answered incorrectly.

Why L-share annuities and long-term riders can be a poor fit

According to the Infinity AWC, “Variable annuities are complex, generally long-term investments that offer tax-deferred treatment of earnings and contain securities and insurance features.” The AWC also explains that “L-share annuities, for example, are designed so that investors pay a higher fee in exchange for the increased liquidity provided by a shorter surrender period.” The AWC adds that because L-share contracts generally charge higher fees than comparable B-share contracts, they may raise suitability concerns when sold with an optional long-term living benefit rider, which “typically requires the customer to hold the variable annuity for an extended period of at least five years, without making withdrawals, to obtain the full benefit of the rider.”

The customer pays extra for a short surrender period. Under FINRA Rule 2330(b)(1)(B), the suitability determination for an exchange must take into consideration, among other things, whether the customer would incur a surrender charge, be subject to a new surrender period, lose existing benefits, or be subject to increased fees or charges.

The rules that apply

Timing matters here. The exchanges and purchases took place between June 2019 and February 2020, before Regulation Best Interest took effect on June 30, 2020. FINRA Rule 2111 governed them, requiring a reasonable basis to believe a recommendation was suitable based on the customer’s investment profile. Recommendations to retail customers made on or after that date fall under Regulation Best Interest (17 C.F.R. § 240.15l-1).

FINRA Rule 2330 adds requirements specific to deferred variable annuities. Under Rule 2330(c), a registered principal “shall approve the recommended transaction only if he or she has determined that there is a reasonable basis to believe that the transaction would be suitable.” Rule 2330(d) requires firms to implement surveillance procedures to determine whether any representative’s rate of effecting exchanges raises concerns. FINRA Rule 3110 requires a supervisory system reasonably designed to achieve compliance with the securities laws and FINRA rules, and FINRA Rule 2010 requires members to observe high standards of commercial honor and just and equitable principles of trade.

What annuity customers can do

The restitution in this AWC is limited. According to the AWC, it is owed to the customers listed on Attachment A, and the largest single payment is $6,927. The $25,436 total matches the additional costs FINRA found the customers paid, and the firm owes it jointly and severally. Attachment A lists nine customers. The AWC does not say whether it accounts for surrender charges, benefits lost from the old contracts, or what the money would have earned elsewhere.

The AWC also states that “[t]he imposition of a restitution order or any other monetary sanctions in this AWC, and the timing of such ordered payments, does not preclude customers from pursuing their own actions to obtain restitution or other remedies.” Customers who believe they were harmed by a variable annuity exchange may be able to bring a claim in FINRA arbitration against the firm and the representative. Depending on the facts, such a claim may seek recovery of costs beyond those FINRA identified.

Steps to Take Right Now

1. Gather your account statements, trade confirmations, and any correspondence with your broker or firm, including emails, texts, and written materials about the investments.
2. Look up your broker on FINRA BrokerCheck at brokercheck.finra.org to review their full disclosure record.
3. Contact a securities arbitration attorney for a consultation to evaluate your options.

Rosenberger + Kawabata represents retail investors in FINRA arbitration proceedings involving unsuitable variable annuity exchanges and failures to supervise annuity recommendations. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.

The information in this post comes from FINRA’s public records, including Acceptance, Waiver and Consent No. 2020065124802, and BrokerCheck database. You can view the full detailed report (CRD# 144302) here.

You can view the full July 2026 FINRA disciplinary actions report here.