According to FINRA, Mariner Financial Group dba Mariner Investment Group has been censured, fined $25,000, and ordered to pay $26,864.84 plus interest in restitution to a customer for willfully violating Regulation Best Interest.

The firm failed to establish, maintain, and enforce a supervisory system reasonably designed to achieve compliance with Reg BI. The firm's written supervisory procedures contained no provisions relating to Reg BI until at least May 2023, and even then discussed it only in general terms. The procedures did not address how associated persons should implement, comply with, and supervise the firm's Reg BI obligations. The firm subsequently updated its procedures to address Reg BI in greater detail.

Additionally, the firm failed to reasonably supervise a representative's recommendation of a non-traditional exchange-traded product (NT-ETP). The representative recommended that a 90-year-old customer purchase a daily-reset NT-ETP, despite the firm's prohibition on such recommendations. The representative identified the purchase as solicited on the firm's books and records, which should have alerted the firm to potential non-compliance. However, the firm failed to identify or investigate this red flag.

The customer subsequently held the NT-ETP for 292 days, resulting in a realized loss of $26,864.84.

This case is particularly important for senior investors. Non-traditional ETPs, including leveraged and inverse products, are generally unsuitable for long-term holding because they reset daily and can experience significant value decay over time. The 292-day holding period in this case was far beyond what these products are designed for.

Investors should understand that Reg BI requires brokers to act in their best interest, and firms must have systems to catch unsuitable recommendations, especially for vulnerable populations like seniors.