Registered representative Gary Goldberg has been suspended from the securities industry for 18 months after regulators found he overcharged clients by $594,590 through unsuitable variable annuity share-class switches.
The Financial Industry Regulatory Authority (FINRA) entered the sanction in March 2023 under AWC #2019064776201. Goldberg, CRD #223919, was associated with Newbridge Securities Corporation and later Bruderman Brothers at the time of the misconduct.
What FINRA found
According to the settlement, Goldberg recommended variable annuity exchanges that placed clients into more expensive B-share or L-share classes when lower-cost alternatives were available. The switches generated higher ongoing asset-based fees for investors and additional compensation for Goldberg.
FINRA found the recommendations unsuitable under the circumstances, violating Rule 2111. Goldberg also failed to adequately disclose the cost differences between share classes, violating Rules 2330 and 2010.
The regulator’s review focused on exchanges Goldberg recommended between 2017 and 2021. During this period, multiple clients moved from lower-cost annuity contracts into B-share and L-share products that carried higher ongoing administrative fees and mortality and expense risk charges. The analysis showed clients would have kept significantly more capital in their original share classes over the expected holding period.
How variable annuity share-class exchanges work
Variable annuity share classes determine how an investor pays for the contract. A-shares typically carry a front-end sales load, B-shares impose a back-end charge with higher ongoing fees, and L-shares use a shorter surrender period with similarly elevated annual charges. When an advisor moves a client from one class to another, the exchange must be justified by a specific change in the investor’s circumstances or goals.
In Goldberg’s case, FINRA determined that the switches were not supported by documented changes in client objectives, time horizons, or risk tolerances. The exchanges effectively turned lower-cost contracts into fee-heavy positions without clear benefit to the investors involved. For retirees relying on fixed-income withdrawals, even a modest annual fee increase compounds into significant lost principal over a decade or more of distributions.
The penalty against Gary Goldberg
Goldberg agreed to an 18-month suspension from any FINRA member firm capacity. He also faces a $25,000 civil penalty and full restitution of $594,590 to affected clients. The restitution amount equals the excess fees the clients incurred.
As with standard AWC agreements, Goldberg neither admitted nor denied the findings. The disciplinary record remains publicly accessible through FINRA BrokerCheck.
Why this case matters to investors
Variable annuity exchange recommendations are common in retirement portfolios, but not every switch serves the client’s interest. Advisors who earn higher commissions on certain share classes have a built-in incentive to recommend products that increase their payout. Without clear documentation explaining why a specific class matches a client’s stated goals, the recommendation may violate suitability rules.
Investors holding variable annuities from Newbridge Securities, Bruderman Brothers, or other firms should review their statements for unexpected fee increases following a recommended exchange. The fee difference between an A-share and a B-share product can exceed one full percentage point annually on a six-figure balance.
What investors can do
If your statements show unexpected fee increases or if your advisor switched your variable annuity share class without clear explanation, compare the new charges against your original disclosure documents. Unsuitable share-class recommendations remain one of the most common sources of variable annuity investor complaints.
Clients who received unsuitable variable annuity recommendations can file a claim through FINRA arbitration. The arbitration process allows investors to seek recovery of unsuitable fees and losses without a court trial. Many cases are resolved within 12 to 18 months through settlements or arbitration awards.
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