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McNally Financial Services Corporation: 2 Regulatory Complaints

McNally Financial Services Corporation

Public records published by the Financial Industry Regulatory Authority (FINRA) and accessed on June 13, 2019 indicate that Texas-based brokerage and advisory firm McNally Financial Services Corporation has received regulatory sanctions in connection to alleged rule violations. Fitapelli Kurta is interested in hearing from investors who have complaints regarding McNally Financial Services Corporation (CRD# 121196).

Established in Texas in 2002, McNally Financial Services Corporation is headquartered in San Antonio, Texas and registered with 38 US states and territories. The company is organized as a corporation and its fiscal year ends in March. The firm conducts 15 types of business, including: mutual fund retailer; municipal securities broker; investment adviser; solicitor of time deposits in a financial institution; and private placements. According to the firm’s BrokerCheck report, McNally Financial Services Corporation is the subject of two regulatory sanctions.

In 2013 FINRA sanctioned McNally Financial Services Corporation in connection to allegation sit lacked specific supervisory systems or protocols concerning the sale of steepeners, which FINRA describes as “complex, non-conventional products” that comprised a substantial portion of the company’s business. According to FINRA’s findings, the firm depended on its “general supervisory system” to supervise steepener transactions, even though that system “was not sufficiently tailored” to address steepeners’ specific qualities and risks, including: “long-term holding periods, the callable nature of the product, illiquid secondary market, and variable interest rates that can be zero.” FINRA’s findings state further that firm supervisory procedures did not specifically address steepeners at all other than “defining structured products.” Steepeners, the findings note, are generally longer-term notes and CDs that mature with ten to twenty years, and which pay interest rates that start fixed and later float “based on the steepness of the yield curve.” That is, a steeper yield curve, or a wider spread between long-term and short-term interest rates, results in a higher interest rate; a flatter yield curve, according to FINRA, or a narrower spread between those rates, results in a lower interest rate. Finally, FINRA states, steepeners are generally callable by their issuers “after a relatively short, pre-specific period,” for instance a single year. In connection with these findings, the firm was censured and issued a fine of $15,000.

In 2011 the State of Nevada sanctioned the firm in connection to allegations it engaged in activities that “amounted to paying an unlicensed sales representative” in the state. In connection with these findings, the firm was issued a fine of $2,500.

If you or someone you know has a complaint regarding McNally Financial Services Corporation, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be able to recover lost funds. Fitapelli Kurta accepts all cases on contingency: we only get paid if and when you collect money. You may have a limited window to file your complaint, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.