Michael Girard DeLuca (CRD #4428054, Beaver Falls, Pennsylvania)

An AWC was issued in which Michael Girard DeLuca (CRD #4428054) was fined $5,000 and suspended from association with any FINRA member in any principal capacity for 15 business days. Without admitting or denying the findings, DeLuca consented to the sanctions and to the entry of findings that he failed to reasonably supervise variable annuity exchanges and surrenders recommended by a registered representative because he failed to reasonably respond to red flags that many of the representative’s exchange applications contained material misrepresentations.

The findings stated that the applications contained information about the purchase date, surrender period, and amount of the exchange that contradicted the representative’s claims that there would be no surrender charge. Michael Girard DeLuca was aware that during the surrender period, investors were permitted to withdraw only a specified percentage of the contract amount. However, in one case, the exchange application revealed that a customer was seeking to exchange 64 percent of the contract value during the surrender period, when the free withdrawal percentage was capped at 10 percent of the contract value. DeLuca failed to question or investigate the representative’s representation on the application that the customer would not incur a surrender charge.

Michael Girard DeLuca also failed to compare the information on the exchange documents with other available external information sources such as the original applications, the surrender fee schedules, or the customers’ most recent account statements, and thereby failed to detect that the representative misrepresented that the customer would not have to pay a surrender charge. In total, these transactions caused customers to incur surrender charges totaling $71,386.94.

The suspension was in effect from January 3, 2023, through January 24, 2023.

(FINRA Case #2020065435402)