The Securities Law Firm of Klayman & Toskes Announces That FINRA Has Fined NEXT Financial $1 Million for Supervisory Failures in Connection With Churning of Customer Accounts

NEW YORK, July 24, 2009 (GLOBE NEWSWIRE) -- The Securities Law Firm of Klayman & Toskes ("K&T"), www.nasd-law.com, announced today that the Financial Industry Regulatory Authority ("FINRA") has fined NEXT Financial Group, Inc. ("NEXT Financial") $1 million, for failure to supervise its branch managers, which led to churning and excessive commissions in customer accounts. NEXT Financial is based in Houston, Texas. According to FINRA:

     Between January 2005 and November 2006, the firm allowed its OSJ
     branch managers to self-supervise their own handling of customer
     accounts without adequate review. In November 2006, the firm
     adopted a Regional Manager supervisory system to provide
     principal review of the OSJ managers' transactions. Through at
     least December 2007, however, this new system was also
     unreasonable because, among other reasons, it required three
     Regional Managers to review thousands of transactions each month
     with limited access to client suitability information.

NEXT Financial's failure to have reasonable policies and written procedures in place led to the firm's failure to detect churning and the generation of excessive commissions in customer accounts.

In addition to finding violations relating to NEXT Financial's supervision of churning in customer accounts, FINRA determined that "the firm's systems and procedures governing variable annuity exchanges were not reasonable." At NEXT Financial, sales of variable annuities made up about 33% of the brokerage firm's revenue during the relevant time frame. FINRA found that NEXT Financial's "written supervisory procedures...failed to provide adequate guidance concerning the criteria that should be considered in recommending variable annuity exchanges...including...a comparison between the features, costs and benefits of the old and new products."

As a result of these violations, customers of NEXT Financial sustained investment losses. These violations also led to FINRA's decision to sanction and suspend the brokerage firm's Chief Compliance Officer and Chief Operating Officer.

Retail and institutional investors who sustained losses in their NEXT Financial accounts can contact K&T to explore their legal rights and options. The attorneys at K&T are dedicated to pursuing claims on behalf of investors who have suffered investment losses. K&T, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.

If you wish to discuss this announcement or have investment losses of $200,000 or more, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956 or visit us on the web at http://www.nasd-law.com.

Klayman & Toskes, P.A.
Steven D. Toskes, Esquire
Jahan K. Manasseh, Esquire
888-997-9956
http://www.nasd-law.com