The Financial Industry Regulatory Authority fined Fifth Third Bancorp's securities unit $1.75 million for violations related to variable annuity sales and exchanges.

Between January 2004 and December 2006, Fifth Third Securities made 250 unsuitable sales and exchanges to 197 customers through 42 brokers, many of whom worked in Fifth Third Bank branches, the agency said Tuesday.

The brokers used lists provided by the bank of customers with maturing certificates of deposit, along with referrals from bank employees, to identify new customers for variable annuities, Finra said.

It also found the company's supervisory systems and procedures were inadequate for policing variable sales and exchanges.

Fifth Third Bancorp neither admitted nor denied the charges.

The agency ordered it to pay more than $260,000 of restitution to 74 customers for surrender charges in unsuitable transactions. The company also must offer all 197 customers the opportunity to rescind such transactions and receive the initial value of their purchase plus interest and any surrender charges.

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