Infinex Investments: The Quiet Giant?

Infinex Investments, now Osaic Institutions, has been involved in several controversies and faced multiple complaints and fines for its dealings with clients and investments. In 2024, the firm was fined $125,000 by the Massachusetts Securities Division for failing to adequately supervise agents selling complex financial products to senior citizens. The firm has also been the subject of various investor complaints, with allegations of misconduct and misrepresentation of investments, resulting in significant financial claims. Infinex was acquired by Advisor Group in 2022, bringing over 750 advisors and $30 billion in assets under the Advisor Group umbrella.

Derek Malone, a broker and advisor at Infinex, faces $250k in investor complaints

Derek Malone, a broker and advisor at Infinex, faces $250,000 in investor complaints, with a total of four complaints surfacing on his BrokerCheck report. Malone, who is based in New York City, is accused of misrepresenting investments, specifically certificates of deposit (CDs). The most recent claim against Malone asserts that he manipulated the true nature of a CD, resulting in a towering claim of damages amounting to $250,000. This complaint echoes another lodged just days before, where Malone, as an Infinex representative, is accused of misrepresenting a CD product, with the investor demanding $150,000 in damages.

Malone's past is also not without controversy. Prior to his role at Infinex, he was associated with Essex National Securities. In 2021, investors accused Malone of misrepresenting a Real Estate Investment Trust (REIT) product as "safe, conservative, and liquid", resulting in a claim of $44,000 in damages. Additionally, in 2020, he faced a complaint of recommending an unfit real estate investment, which was settled with a payment of $55,000 in 2021.

The multiple complaints against Malone raise serious questions about the suitability of the investments he recommended to his clients. As a financial advisor, Malone had a responsibility to evaluate and manage investments within his customers' accounts, ensuring they met their individual needs and objectives. However, the accusations suggest that Malone may have failed to uphold this duty, potentially causing significant financial losses for his clients.

The situation highlights the importance of investor protection and the need for reliable legal and advisory services to safeguard investors' interests. It also underscores the potential consequences for financial advisors who fail to meet their legal and ethical obligations, as they can be held liable for any investment losses incurred by their clients.

Infinex was fined $125,000 for selling products seniors didn't understand

Infinex Investments, a brokerage firm majority-owned by a consortium of nearly 40 banks, was fined $125,000 for selling financial products to senior citizens that they did not understand. The firm was found to have failed to adequately supervise its agents, who were selling high-commission securities products, including real estate investment trusts and variable annuities.

The Massachusetts Securities Division began an investigation into Infinex's sales practices after receiving complaints from senior citizens, who believed they had been sold investments they did not ask for or understand. The investigation uncovered that Infinex agents were targeting customers at local banks, particularly senior citizens, with unsuitable investment recommendations. In one case, a 54-year-old supermarket clerk with limited investment experience invested $64,000 in a non-traded REIT and a fixed annuity with a 7-year surrender period. The Infinex advisor allegedly misrepresented the customer's savings as $750,000 and received a commission of $3,600 for the transaction.

As a result of the investigation, the Massachusetts securities regulator, William Galvin, Secretary of the Commonwealth, censured Infinex and ordered the firm to pay a fine of $125,000. The order also required Infinex to make full restitution to the affected investors and to review its supervisory structure, supervision of representatives, email monitoring, and sales practices to ensure compliance with Massachusetts securities laws.

This case highlights the importance of adequate supervision and ethical sales practices in the financial industry, especially when dealing with senior or vulnerable customers. It serves as a reminder to financial firms and their agents to prioritize the best interests of their clients and provide clear and accurate information about the products they are offering.

To prevent similar incidents in the future, financial firms should ensure that their employees are well-trained in ethical sales practices and are supervised effectively. Additionally, firms should implement robust compliance programs and regularly review their sales practices to identify and address any potential issues. By prioritizing the protection of their customers, financial firms can maintain the trust and confidence of their clients and the public.

Advisor Group acquires Infinex, a broker-dealer with 750+ advisors and $30 billion in assets

Advisor Group, one of the largest networks of independent wealth management firms in the US, has acquired Infinex Financial Holdings, a broker-dealer with over 750 advisors and $30 billion in assets. The acquisition, announced on May 19, 2022, will expand Advisor Group's presence in the financial institution market, particularly with banks and credit unions.

Infinex, headquartered in Meriden, Connecticut, has a strong focus on supporting financial institutions and their advisors. With over 230 community-based bank and credit union programs across all 50 states, Infinex has thrived due to its commitment to enhancing the client experience through personalised support and long-lasting relationships. The firm offers leading-edge technology, in-field relationship management, wealth and life insurance services, and practice management solutions.

The acquisition will create a seamless transition for Infinex's partners, advisors, and clients, with no restructuring or repapering of accounts necessary. Infinex will become a member firm in the Advisor Group network, retaining its brand, leadership team, and unique operating model. The combination is expected to further accelerate Infinex's already robust year-over-year growth.

"This acquisition aligns Advisor Group with one of the most widely respected firms specialising in helping financial institutions build and grow successful wealth management programs," said Jamie Price, President and CEO of Advisor Group. Stephen Amarante, President and CEO of Infinex, added that partnering with Advisor Group will allow them to "grow our influence and support model while maintaining the value of our firm's culture, people, and position in the marketplace."

The deal brings significant scale and a dedicated channel for advisors in the financial institution market to Advisor Group, positioning them for even greater success in this space.

Infinex faces scrutiny for failing to supervise agents selling high-commission securities

Infinex Investments, a brokerage firm majority-owned by a consortium of nearly 40 banks, has come under scrutiny for its sales practices. The Massachusetts Securities Division, led by Secretary of the Commonwealth William Galvin, investigated the firm after receiving complaints from senior citizens. The probe uncovered that Infinex agents were selling complex financial products, including real estate investment trusts and variable annuities, to elderly customers who did not fully comprehend the nature of their investments.

In one instance, a 54-year-old supermarket clerk with limited investment experience invested a significant portion of their savings in a non-traded REIT and a fixed annuity with a lengthy surrender period. The Infinex advisor allegedly misrepresented the investor's financial position, claiming they had far more savings than they did, and earned a substantial commission from the transactions.

The investigation revealed serious supervisory failures within Infinex. One supervisor, responsible for overseeing around 180 representatives, admitted to dedicating only a small fraction of their time to compliance duties. As a result, the firm was censured and ordered to pay a $125,000 fine, in addition to making full restitution to affected investors.

The consent order also mandated that Infinex cease and desist from further violations of Massachusetts securities laws and retain an independent compliance consultant to thoroughly review its supervisory structure, compliance practices, and the training and recommendations provided to its agents. This scrutiny and subsequent penalties serve as a reminder of the legal and ethical obligations of broker-dealers operating within the financial industry.

Infinex clears through Pershing, one of Advisor Group's clearing firms

Advisor Group's acquisition of Infinex Financial Holdings, a broker-dealer with over $30 billion in assets, is a strategic move to expand its multi-channel leadership and accelerate growth. This deal brings Advisor Group significant scale in the financial institution market, leveraging Infinex's network of over 230 community-based banks and credit unions.

Infinex, now a subsidiary of Advisor Group, will continue to clear through Pershing, one of the Advisor Group's clearing firms. This seamless transition ensures no disruption to Infinex's business operations and client accounts. Pershing, a trusted name in the industry, provides the necessary infrastructure and support for Infinex's brokerage and trading activities.

The acquisition positions Advisor Group to align its resources with bank and credit union-based financial advisors and their clients across the country. By partnering with Infinex, Advisor Group gains access to a dedicated channel of financial institutions, enhancing its presence in this market segment.

With no restructuring or repapering of accounts necessary, Infinex will retain its distinct brand, executive leadership team, and unique operating model within the Advisor Group network. This strategic alignment allows Advisor Group to expand its reach and influence while maintaining Infinex's culture, values, and relationships with financial institutions, credit unions, and their advisors.

The combination of Infinex's robust growth and Advisor Group's industry-leading resources creates a powerful synergy, driving further scale and enhancing the client experience. This integration empowers Infinex to build on its success, leveraging Advisor Group's capital and backing to turbocharge its growth trajectory.

Frequently asked questions