4 brokers targets of probe in NH
Northwestern Mutual agents still on the job
Four current Northwestern Mutual brokers, including the chief of its network office in northern New England, are under investigation by New Hampshire authorities for allegedly misleading consumers, among other potential violations of state law.
The four agents, all of whom continue to represent Northwestern Mutual and sell insurance and investments under the company’s name and advise clients, have been under investigation since September 2022, according to public disclosures from the Financial Industry Regulatory Authority, or FINRA. The authority is a nonprofit overseen by the Securities and Exchange Commission and regulates brokers selling investments.
The agents are among a group including at least two former Northwestern Mutual brokers that the state has been investigating for nearly two years for similar allegations. None of the individuals responded to the Journal Sentinel’s request for comment.
Julia Fennelly, a spokeswoman for Northwestern Mutual, headquartered in Milwaukee, said she could not comment on the investigation but said in an email that the company “takes matters of governance and compliance seriously.”
“In the event of investigation by either the company or a regulator or both, our policy is that the individual(s) in question will work with the corporate office and / or the regulatory body to cooperate with the investigation,” she said. “Dependent on a situation, the company will determine if it is appropriate to take disciplinary action in addition to any regulatory discipline.”
Scott Christensen, the managing partner of Northwestern Mutual Northern New England, based in Manchester, New Hampshire, oversees more than a dozen brokers there, along with additional staff members. Agents in the office sell insurance policies and investments nationwide but primarily serve New Hampshire, Vermont and Maine.
The New Hampshire Bureau of Securities Regulation is investigating him for failing to supervise representatives in his office who sent marketing emails to consumers allegedly containing misleading statements, according to FINRA. The two former agents who were terminated by Northwestern Mutual also worked under him.
“It is surprising that (Northwestern Mutual) would still employ a supervisor where a state regulator said they failed to supervise brokers,” said Jonathan Kurta, an attorney specializing in securities fraud who has worked on arbitration cases involving financial fraud na
tionwide for 16 years.
“That is not OK. You can’t use the firm’s good name and commit fraud and the firm not be responsible.”
Kurta says he has been following New Hampshire’s probe and has spoken with clients who have been solicited to invest by one of the former Northwestern Mutual brokers under investigation.
Brian Belliveau, John Quinn Hogan and Stephen Graham are the three other agents under investigation. They are financial advisers with ClearView Financial Group, a firm contracted through Northwestern Mutual to sell Northwestern Mutual products and services. All three are being investigated by the New Hampshire Insurance Department.
State authorities believe all three used an unapproved form to obtain client data for the purpose of applying for non-variable life insurance policies. Belliveau is also being investigated over allegations of sending misleading marketing emails.
The allegations are troubling, along with Northwestern Mutual failing to terminate its association with the agents, Kurta said.
“This is a huge red flag. It’s more than a red flag” he said. “Without the logo of Northwestern behind the broker, who is the broker? They’re no one. They’re just a sales agent. Northwestern has to realize they’re using their name to solicit business based on misleading statements.”
Insurance and investment brokers, including the ones under investigation, are not direct employees of Northwestern Mutual, but contractors who are licensed to represent and sell Northwestern Mutual products. Agents receive an upfront commission for their sales while their supervisors and the firm take a portion of the profit.
While agents benefit upfront from a sale, consumers don’t reap any benefits or realize any problems until far later, Kurta said. It can take years for consumers to realize they were sold a policy that was not in their best interest. By that time the broker who misled them is often long gone from the firm.
“There could be terms in the policy that make it a bad policy that you don’t realize for a decade,” he said.
Joy Miller worked as an employee of Christiansen’s Northwestern Mutual network office in Manchester, New Hampshire, for nine months in 2021 before leaving after lodging an internal complaint against some of the practices she saw there. She worked in sales operations, facilitating the logistics of deals there.
Misleading practices alleged
It was common, she said, for brokers to search LinkedIn for business prospects, messaging people at various companies and telling them they had already sold Northwestern Mutual products to other people at their company.
“Which was misleading because half the time they weren’t working with anyone,” she said.
To sell insurance or investments in a certain state, brokers must be licensed there.
Often, brokers are licensed in multiple states, selling policies to people all over the country even though the broker may be based in New Hampshire.
The fidelity toward the insurance and investment industry’s strict licensing rules was quite loose in Christensen’s office, Miller said.
Brokers in that office would prospect and secure deals in states where they were not licensed, Miller said. Then they would have another broker finish the deal and pay them on the side, or rush a license application through before the deal was finalized.
“Many times I’d hear, ‘Hey, I really need to get this license through, I already have a deal going on.’” she said. “Because I was part of the sale logistics of it, I would file it for them.”
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