According to FINRA, Scott William Norvell was fined $10,000 and suspended for two-and-one-half months for negligently misrepresenting death benefits available from variable annuity products, causing his firm to maintain inaccurate books and records by falsifying signatures, and falsely attesting on a compliance questionnaire.

Norvell negligently misrepresented to customers that a new variable annuity product had a guaranteed death benefit that was equal to the greater of the account value or the customer's contributions, less adjusted withdrawals. However, the guaranteed death benefit was only available by selecting an optional rider on the application and paying an additional fee. Norvell did not select the rider on the applications or collect the additional fee, so customers did not receive a guaranteed death benefit. A majority of the transactions took place after Norvell's supervisor had notified him that he had failed to select the optional death benefit rider in connection with a separate transaction.

Norvell also caused his firm to maintain inaccurate books and records by falsifying signatures of senior customers by electronically signing documents on their behalf. Although Norvell had prior permission from the customers, the firm prohibited signing a customer's name or initials regardless of the customer's knowledge or consent. In addition, Norvell falsely attested in a compliance questionnaire that he had not signed or affixed another person's signature on a document.

The misrepresentation of death benefits is particularly serious because customers exchanged existing annuities based on incorrect information about a key feature of the new product. Death benefits are important protections, especially for seniors, and customers who thought they had guaranteed death benefits actually had no such protection.

The fact that Norvell continued making these misrepresentations after being notified of the error demonstrates negligence at best. The falsification of customer signatures and the false compliance certification compound the violations by showing a pattern of misconduct and dishonesty.