FINRA

WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, FINRA RULES 2010, 2020, NASD RULES 2110, 2120; VIOLATED FINRA RULE 2010, NASD RULES 2110, 2310, 3110: FRAZIER MADE FALSE REPRESENTATIONS IN CONNECTION WITH THE SALE OF VARIABLE ANNUITIES. FRAZIER TOLD CUSTOMERS THAT THEY WOULD EARN A RETURN OF 7% OR MORE BY PURCHASING VARIABLE ANNUITY PRODUCTS AND THAT THE PRINCIPAL AMOUNT THEY INVESTED THROUGH THE VARIABLE ANNUITY WOULD BE GUARANTEED AGAINST LOSS. FRAZIER ASSURED A CUSTOMER THAT HE WOULD NOT BE CHARGED ANNUAL FEES ON HIS VARIABLE ANNUITIES, AND ADVISED ANOTHER CUSTOMER THAT HE, FRAZIER, WOULD ONLY MAKE MONEY FROM THE ANNUITY PURCHASE IF THE CUSTOMER MADE MONEY. ALL OF THESE REPRESENTATIONS AND ASSURANCES WERE FALSE. SOME OF THE CUSTOMERS SEPARATELY CONTACTED FRAZIER TO QUESTION WHY A PARTICULAR ANNUITY WAS NOT PERFORMING AS EXPECTED. THE CUSTOMERS QUESTIONED WHY THEY WERE NOT SEEING THE GUARANTEED 7% RETURN REFLECTED IN ACCOUNT DOCUMENTS AND WHY THE VALUES OF THEIR ANNUITIES APPEARED TO BE DECREASING. FRAZIER ASSURED THEM THAT THEY WERE RECEIVING THE 7% RETURN AND THAT THEIR PRINCIPAL WAS SAFE. FRAZIER SEPARATELY TOLD CUSTOMERS THAT THE 7% RETURN HAD NOT YET BEEN ADDED TO THEIR ANNUITY BUT SOON WOULD BE, THAT AN ANNUITY WAS MAKING MONEY BUT THAT THE 7% RETURN WOULD ONLY BE REFLECTED ON ANNUAL, NOT QUARTERLY, STATEMENTS, THAT FOR VARIOUS REASONS, HE, FRAZIER, HAD NOT BEEN ABLE TO OBTAIN DOCUMENTS REFLECTING THE 7% RETURN AND IN RESPONSE TO WHY THE VALUE OF AN ANNUITY SEEMED TO BE DECLINING, FRAZIER PROMISED TO LOOK INTO THE MATTER, BUT NEVER DID. FRAZIER MADE UNSUITABLE ALLOCATION RECOMMENDATIONS TO HIS VARIABLE ANNUITY CUSTOMERS. THE CUSTOMERS HAD NOT COMPLETED COLLEGE AND HAD LITTLE INVESTMENT EXPERIENCE. ALL WERE AT OR NEAR RETIREMENT AGE, WERE OF MODERATE MEANS AND EXPRESSED CONCERNS ABOUT LOSING THEIR PRINCIPAL. NEVERTHELESS, AT VARIOUS TIMES DURING THE TERMS OF THEIR VARIABLE ANNUITY CONTRACTS, FRAZIER RECOMMENDED THAT THE CUSTOMERS ALLOCATE MOST OR ALL OF THEIR ANNUITY ASSETS TO A SINGLE INVESTMENT PORTFOLIO, AND OFTEN THE PORTFOLIO HE RECOMMENDED INVOLVED HIGH-RISK INVESTMENTS. FRAZIER'S RECOMMENDATIONS TO OVER CONCENTRATE ASSETS IN HIGH-RISK INVESTMENTS WERE UNSUITABLE FOR CUSTOMERS WHO WERE AT OR NEAR RETIREMENT, HAD ONLY MODERATE MEANS, AND WERE CONCERNED ABOUT PRESERVATION OF PRINCIPAL. FRAZIER RECOMMENDED THAT CUSTOMERS TAKE OUT HOME MORTGAGES FROM THEIR PAID-OFF HOMES AND INVEST THE PROCEEDS INTO VARIABLE ANNUITIES. SOME CUSTOMERS FOLLOWED THIS ADVICE. FRAZIER CONVINCED CUSTOMERS TO USE "PROFITS" FROM THEIR ANNUITIES TO PURCHASE DUPLICATIVE OR EXCESSIVE INSURANCE POLICIES, AND ARRANGED FOR SYSTEMATIC WITHDRAWALS FROM THE VARIABLE ANNUITIES TO PAY THE INSURANCE PREMIUMS. THE WITHDRAWALS TO PAY THE INSURANCE PREMIUMS RESULTED IN SEVERAL CUSTOMERS INCURRING ADDITIONAL TAX LIABILITY AND SURRENDER CHARGES. FRAZIER ALSO RECOMMENDED THAT A CUSTOMER, WHOSE VARIABLE ANNUITY WAS BEYOND THE SURRENDER PERIOD AND WAS NO LONGER SUBJECT TO DEFERRED SALES CHARGES, SELL THE ANNUITY AND INVEST THE PROCEEDS IN A NEW VARIABLE ANNUITY, EXPOSING HER TO A NEW PERIOD OF DEFERRED SALES CHARGES. THESE STRATEGIES PRODUCED ADDITIONAL COMPENSATION FOR FRAZIER BUT WERE UNSUITABLE FOR THE CUSTOMERS. FRAZIER OFTEN COMPLETED OR PARTIALLY COMPLETED FORMS THAT THE CUSTOMERS WERE REQUIRED TO FILL OUT WHEN APPLYING FOR A VARIABLE ANNUITY CONTRACT. SEVERAL OF THE FORMS COMPLETED BY FRAZIER WERE INACCURATE. FRAZIER OVERSTATED THE NET WORTH AND INCOME OF CUSTOMERS AND INACCURATELY CHARACTERIZED THE RISK TOLERANCE OF CUSTOMERS. MOREOVER, FRAZIER REGULARLY HAD CUSTOMERS SIGN UNDATED, BLANK BROKERAGE FORMS INCLUDING, AMONG OTHERS, REQUESTS FOR PARTIAL WITHDRAWALS AND ANNUITY ALLOCATION CHANGE FORMS. APPROXIMATELY 80 SUCH SIGNED, BUT OTHERWISE BLANK, FORMS WERE LOCATED AMONG HIS FILES, ALONG WITH CORRESPONDENCE SPECIFICALLY INSTRUCTING CUSTOMERS TO SIGN BUT NOT DATE BLANK FORMS.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

6/4/2013

WITHOUT ADMITTING OR DENYING THE FINDINGS, FRAZIER CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. FRAZIER UNDERSTANDS THAT THIS SETTLEMENT INCLUDES A FINDING THAT HE WILLFULLY VIOLATED SECTION 10(B) AND RULE 10B-5 OF THE SECURITIES EXCHANGE ACT OF 1934 AND THAT UNDER ARTICLE III, SECTION 4 OF FINRA'S BY-LAWS, THIS MAKES HIM SUBJECT TO STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER.