Investigating Customer Complaints Against Voya Financial Services

Our law firm is investigating customer complaints against Voya Financial Services.  Voya, a broker-dealer and investment adviser based in Des Moines, Iowa, is no stranger to regulatory scrutiny, having paid millions over allegations it failed to uphold its duties to customers. If you or someone you know has a complaint regarding your Voya Financial Services account, please call us at 212-203-9300 to speak to an attorney for free.  

Complaint: Systemic Overcharges at Voya Financial  

Voya Financial systemically over-charged advisory clients investing in certain mutual fund share classes, recommended money market funds that paid undisclosed revenue-sharing payments to the firm, and caused customers to pay higher fees for products that were available without those fees, according to a 2020 order by the Securities and Exchange Commission.

The violations extended from 2013 until 2018, according to the SEC, and involved the recommendation of mutual funds that came with 12b-1 fees even though less expensive options were available to customers. As a report by AdvisorHub describes, the firm additionally “recommended only two money-market funds as sweep options for cash in advisory accounts because its clearing firm shared revenue that it received from the two funds with Voya.” Even though Voya’s clearing firm offered “more than 130 money-market funds,” Voya only recommended two to its advisory clients for at least a four-year period.

The SEC’s order finally alleged that Voya did not allow the sale of illiquid alternative investments in customers’ fee-based accounts, instead allowing advisors to sell such products through commission-based brokerage accounts. The SEC charged that because those products were available without commission fees in brokerage accounts, Voya violated its best-execution obligations. The firm reached a settlement with the SEC in which it agreed to pay a total of $23 million: a $9 million civil penalty, $11.5 million in fees and disgorgement, and $2.4 million in interest.

Voya Rep Steals from Friends, Family in $5 Million Ponzi Scheme

A former Voya Financial Services representative who orchestrated a massive Ponzi scheme was deemed a “predator” by the judge who sentenced him in 2016, according to the Times-Union. Frederick Monroe of Queensbury, New York, who was registered with Voya from 2006 until his termination in 2016, took in more than $5 million from investors in a scheme that extended from 2002 until 2015. He pitched his customers “bonds for their retirements,” according to the Times-Union, and once they wrote him personal checks for the investments he instead spent the funds on “personal credit card and mortgage payments, hotels and airline tickets,” as well as payments to other investors.

Monroe’s victims reportedly included friends, family members, “a grieving widow” and “a disabled woman.” One longtime friend and client, Rose Mary Schrader, told the judge at Monroe’s sentencing hearing that she was reeling from the death of her husband “when Monroe urged her to invest more than $500,000 she inherited from both her husband and her father.” A friend of Monroe’s for decades, she said she thought of him as a family member. “I was so trusting of him, I believed he would never hurt me and I could trust him with my life,” she told the judge. “You can imagine the shock when I realized he had stolen all of the money I had invested with him and also all the cash I gave him.”

Another victim told the judge that she gave him an investment of $1.5 million in funds that she had received in an award after getting disabled by an injury years earlier. When he eventually informed her that her investment was dwindling, he “convinced her to take out a $300,000 mortgage on a house that was already paid for and to invest the mortgage money.” She told the judge that his theft of her funds left her home in danger of foreclosure. “I have been required to borrow money to pay for utilities and have been notified that my electrical services at my home will be terminated if I am unable to make up the payments that I have missed,” she said. ” I don’t know how I can do that. I am totally disabled and unable to work. The money I provided to Mr. Monroe was what I intended to rely on to support me for the rest of my life.”

Another victim was described by the Times-Union as “a single mother of three who worked as a hairdresser for 40 years.” She reportedly invested $20,000 with Moore, almost all of a $25,000 inheritance she received when her father died. “I always felt secure that I had this money as a backup,” she told the judge. ” I was so shocked to learn it was taken in a Ponzi scheme. My heart sank knowing I had lost all the money I had received from my dad.”

Monroe accepted a plea deal and was ultimately sentenced in 2016 to five-and-one-third to 16 years in prison. Voya Financial reportedly terminated his registration after he was arrested, and FINRA barred him in 2015. According to a report by CBS, at least one of his victims was unsatisfied with the outcome. “He read from a written script that I’m sure attorneys helped him write. I don’t believe it came from his heart,” said Rose Mary Shrader. “I’m 71-years-old and he’s taken all my money. I don’t have a lot of time left.”

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