Jun 1? 2008 15:25 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2688 @2:32PM PS FILED ~ APR 7 28 nevunsternina ‘ ALEX SINK ; foe, a CHIEF FINANCIAL OFFICER Dogketed ‘by; STATE OF FLORIDA ’ IN THE MATTER OF: DAVID LENFORD REEDY CASE NO,: 90906-07-AG / . ADMINISTRATIVE COMPLAINT. TO: DAVID LENFORD REEDY , 227 Ruby Lake Lane Winter Haven, Florida 33884-3267 DAVID LENFORD REEDY c/o R. Nathan Hightower, Esq., MacFarlane, Ferguson & McMullen, P.A. 625 Court Street Clearwater, Florida 33756 You, DAVID LENFORD REEDY, are hereby notified that, pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, DAVID LENFORD REEDY, License LD. #6008995, are currently licensed in this state as a Life, including Variable Annuity and Health Agent (2-15). 2. Atall times pertinent to the dates and occurrences referred to herein, you, DAVID LENFORD REEDY, were licensed in this state as an insurance agent. 3. At all times material to the dates and occurrences herein, you, DAVID LENFORD REEDY, were associated with the Florida entity known as Ameri-Life & Health Jun 1? 2008 15:25 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2668 2:32PM P4 Services of Polk County, L.L.C. (“Ameri-Life Polk”) with its principal address at 1166 Havendale Boulevard, Spring Lake Square, Winter Haven, Florida 33881. 4, At all times material hereto you, DAVID LENFORD REEDY, acted as an agent in the state of Florida for licensed insurers, including American Equity Investment Life Insurance Company (“AEILIC”). 5, During the years 2005 and 2006, you, DAVID LENFORD REEDY, as a licensed insurance agent in the state of Florida, exploited elderly individuals through knowing and wiliful misrepresentations concerning terms and conditions of annuities and other insurance products. You, DAVID LENFORD REEDY, knew the individuals would rely upon your misrepresentations and the individuals did rely upon your misrepresentations. 6. Your misrepresentations induced the elderly consumers to purchase new annuities and/or policies or to replace existing policies, and caused the sale of policies to individuals that were not in the best interest of the individuals but yielded commissions to you. 7. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. 8. Rule 69B-215.210, Florida Administrative Code provides, The Business of Life Insurance is hereby declared to be a public trust in which service all agents of all companies have a common obligation to work together in serving the best interests of the insuring public, by understanding and observing the laws governing Life Insurance in letter and in spirit by presenting accurately and completely every fact essential to a client's decision, and by being fair in all relations with colleagues and competitors always placing the policyholder’s interests first. COUNTI 9. The above General Allegations are hereby realleged and fully incorporated herein by reference. Jun 1? 2008 15:25 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2665 2:32PM PS 10, In or about March 2006, using fraudulent misrepresentations and/or material omissions regarding the terms and conditions of annuities, you, DAVID LENFORD REEDY, exploited an elderly Port $t, Lucie, Florida female, D.F., by influencing her to enter, inappropriate annuity investments that were unsuitable for her needs and that you, DAVID LENFORD REEDY, knew were not suitable for D.F.’s needs. Further, the inappropriate annuity investments were not in D.F.’s best interest and you, DAVID LENFORI) REEDY, knew they were not in D.F.’s best interest. 11, At the time you, DAVID LENFORD REEDY, solicited and transacted insurance business with her, D.F. was eighty-five (85) years old. 12. In or about March 2006, a telemarketer called D.F, and set up an appointment for insurance agent Dorothy Axler Apicella (“Agent Apicella”), to meet with D.F. at her home. D.F. made the appointment to discuss Medicare and AARP insurance issues. 13. _—- After spending a considerable amount of time at D.F.’s home and finding out that D.F. had some annuities, Agent Apicella, called you, DAVID LENFORD REEDY, to come to D.F.’s house. You, DAVID LENFORD REEDY, and Agent Apicella represented to D.F. that she could not make any money with her then-owned annuities, and that she could make 8% ona new annuity through a company or companies represented by you, DAVID LENFORD REEDY. 14. You, DAVID LENFORD REEDY, only wanted to discuss transactions that involved the replacement of D.F.’s annuities with annuities sold by a company or companies that you, DAVID LENFORD REEDY, represented. 15, You, DAVID LENFORD REEDY, and Agent Apicella went to D.F.’s home three or four more times convincing her-to replace her then-owned annuities. After these numerous visits, you, DAVID LENFORD REEDY, and Agent Apicella persuaded D.F. to sign blank Jun 1? 2008 15:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2665 82:33PM Pe 4 documents to facilitate the transaction with AEILIC. 16. You, DAVID LENFORD REEDY, did not make a reasonable effort to obtain accurate information regarding D.F.’s financial background, assets or investment objectives. In spite of this fact, you, DAVID LENFORD REEDY, or Agent Apicella with your knowledge and approval, entered information on the “suitability questionnaire” that was a part of D.F.’s application. The information you, DAVID LENFORD REEDY, entered on the D.F.’s . “suitability questionnaire” was incorrect, and you, DAVID LENFORD REEDY, knew or reasonably should have known that it was incorrect. 17. You, DAVID LENFORD REEDY, entered the aforementioned incorrect information in order to gain approval for D.F.’s application and/or to disguise the unsuitability of the annuity. 18. —_-D.F.’s application, dated March 24, 2006 was assigned policy contract #608098 by American Equity Investment Life Insurance Company (“AEILIC”). You, DAVID LENFORD REEDY, signed the application as the Agent. 19. Subsequently, D.F. contacted Agent Apicella and told her to stop the transaction because D.F. had discussed the transaction with her son and he advised her against it. Even though Agent Apicella responded to this request by telling D.F. that she wished that D.F. would not talk to her son, D.F. cancelled the application with AEILIC. 20. ‘During the solicitation and transaction, D.F. continually expressed concern about the surrender charges that she would incur through this transaction, You, DAVID LENFORD REEDY, misrepresented the surrender charges, and indicated to D.F. that it did not matter because the company that you, DAVID LENFORD REEDY, represented paid 8%, 21. You, DAVID LENFORD REEDY, through the use of material omissions and Jun 1? 2008 15:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jun. 1? 2668 @2:33PM Pr fraudulent material misrepresentations upon which you knew D.F. would rely, willfully persuaded D.F. that the appropriate investment for her needs was an equity-indexed deferred annuity from AEILIC. 22. As an unsophisticated investor, D.F. relied upon you, DAVID LENFORD REEDY, as a licensed insurance professional to act in her best interest and to recommend suitable investments, only. , 23. Without your elderly clieni’s understanding of the terms and conditions of the investment that you recommended, you, DAVID LENFORD REEDY, willfully advised D-F. to invest in an annuity with surrender charges, whereby her access to her money would be severely limited for several years following this transaction. 24. In spite of Agent Apicella’s and your attempts to obviate D.F.’s decision to cancel or rescind the transaction, AEIIC policy # 608098 was never issued. 25. You, DAVID LENFORD REEDY, were aware, or reasonably should have been aware, of all of the aforementioned circumstances. You, DAVID LENFORD REEDY, willfully misrepresented and/or omitted pertinent and material facts in your interaction with D.F. in order to secure commissions for you or for Ameri-Life Polk on your behalf. ‘26. You, DAVID LENFORD REEDY, stood to personally profit through the transaction with D.F. IT 18S THEREFORE CHARGED that you, DAVID LENFORD REEDY, have violated or are accountable under provisions of one or more of the following: the Florida Statutes or the Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) If the license or appointment is willfully used, or to be used, to circumvent any of Jun 1? 2008 15:26 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2668 82:33PM Pe 4 the requirements or prohibitions of this code. [Section 626.611(4), Florida Statutes]; (b) Willful misrepresentation of any insurance policy or annuity contract or. willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.61] (5), Florida Statutes]; (c) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (d) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license ot appointment. [Section 626.611(8), Florida Statutes}; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; (g) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. [Section 626.621(2), Florida Statutes]; (h) Violation of the provision against twisting, as defined in Section 626.9541 (1)(). [Section 626,621(5), Florida Statutes]: (i) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part LX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest. [Section 626.621(6), Jun 1? 2008 15:27 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2668 2:34PM Pa Florida Statutes]; qi) Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual. [Section 626.9541(1)(k)1, Florida Statutes); (k) Knowingly making any misleading representation or incomplete or, fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer. [Section 626.9541(1)(), Florida Statutes]; (i) In recommending to a senior consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance transactions, an insurance agent, or an insurer if no insurance agent is involved, shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs. [Section 627.4554(4)(a), Florida Statutes]; (m) Before executing a purchase or exchange of an annuity resulting from a recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is involved, shall make reasonable efforts to obtain information concerning the senior consumer's financial status, tax status, and investment objectives and such other information used or considered to be reasonable by the insurance agent, or the insurer if Jun 1? 2008 15:27 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2668 @2:34PhM Pia + no agent is involved, in making the recommendation. [Section 627.4554(4)(b), Florida Statutes]; (n) No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, any advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading. [Rule 69B-215.230(2), Florida Administrative Code]. COUNT I 27. The above General Allegations are hereby realleged and fully incorporated herein by reference. 28. During the Spring of 2006 using fraudulent misrepresentations and/or material omissions regarding the terms and conditions of annuities, you, DAVID LENFORD REEDY, exploited an elderly Hobe Sound, Florida female, L.K., by influencing her to enter inappropriate annuity investments that were unsuitable for her needs and that you, DAVID LENFORD REEDY knew were not suitable for L.IK.’s needs. Further the inappropriate annuity investments were not in L.K.’s best interest and you, DAVID LENFORD REEDY, knew they were not in L.K.’s best interest. 29. At the time you, DAVID LENFORD REEDY, solicited and transacted insurance business with her, L.K. was seventy-five (75) years old. 30. In the early part of 2006, Agent Apicella, or someone on her behalf, set an Jun 1? 2008 15:27 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 1? 2668 @2:34PM Pil a appointment for Agent Apicella to meet with L.K., and her husband, at their home. L.K. made the appointment to discuss Medicare issues. 31. After Agent Apicella invited you, DAVID LENFORD REEDY, to join her in the solicitation of L.K., the two of you went to L.K.*s home on multiple occasions during the time of your solicitation and transaction of insurance business with L.K. You, DAVID LENFORD REEDY, and Agent Apicella wanted to sell L.K. an equity-indexed deferred annuity in spite of L.K.’s Medicare-based reason for allowing you into her home. 32. Several weeks after your first contact with L.K., Agent Apicella called L.K. and requested ten (10) minutes of L.K. and her husband’s time, L.K. trusted you and allowed you, DAVID LENFORD REEPY, and Agent Apicella into her home. For an hour and a half, you, DAVID LENFORD REEDY, and Agent Apicella discussed transactions that involved the replacement of L.K.’s certificate of deposit (“CD”) with an annuity sold by AEILIC, a company that you, DAVID LENFORD REEDY, represented. 33. During the solicitation and transaction, L.K. expressed concern about early withdrawal penalties on her CD that she would incur through this transaction. You, DAVID LENFORD REEDY, and Agent Apicella, through both express statements and material omissions, represented to L.K. that she could not make any money with her CD, and that she would quickly make ten thousand dollars ($10,000) on an annuity through AEILIC. 34. After you, DAVID LENFORD REEDY, and Agent Apicella badgered and cajoled L.K., she reluctantly signed an application that was dated May 9, 2006. L.K.’s application was eventually assigned policy contract #612674 by AEILIC, 35. You, DAVID LENFORD REEDY, and Agent Apicella even went to L.K.’s bank to get the money from her CTD to pay the premium on the annuity. Jun 1? 2008 15:28 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 28685 82:35PM Pl2 36. After learning about the surrender period and charges associated with the AEILIC annuity, L.K. contacted Agent Apicella with regard to rescinding or canceling the annuity. Eventually and without any help from you, DAVID LENFORD REEDY, L.K. contacted a financial advisor at an unrelated bank who assisted her in canceling the application and getting her principal back from AEILIC. L.K. still lost almost two thousand dollars ($2,000) in penalties for withdrawing the funds from her CD. 37. You, DAVID LENFORD REEDY, through the use of material omissions and fraudulent material misrepresentations upon which you knew L.K. would rely, and upon which L.K. did rely to her detriment, willfully persuaded LK. that the appropriate investment for her needs was an equity-indexed deferred annuity from AEILIC., 38. As an unsophisticated investor, L.K. relied upon you, DAVID LENFORD REEDY, as a licensed insurance professional to act in her best interest and recommend suitable investments, only. 39. Without your elderly client’s understanding of the terms and conditions of the investment that you recommended, you, DAVID LENFORD REEDY, willfully advised L.K. to invest in an annuity with a 20% declining, seventeen year surrender charge, whereby her access to her money would be liniited for the following eighteen years, or until L.K. would be 92 years of age. 40. You, DAVID LENFORD REEDY, were or reasonably should have been aware of all of the aforementioned circumstances, and you, DAVID LENFORD REEDY, willfully misrepresented and/or omitted pertinent and material facts in your, DAVID LENFORD REEDY, interaction with L.K. in order to secure commissions for you, DAVID LENFORD REEDY, or for Ameri-Life Polk on your behalf. Jun 1? 2008 15:28 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jun. 1? 2868 @2:35PM Pls 41. You, DAVID LENFORD REEDY, stood to personally profit through the transaction(s) with L.K. IT IS THEREFORE CHARGED that you, DAVID LENFORD REEDY, have violated or are accountable under provisions of one or more of the following: the Florida Statutes or the Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: ) (4) ‘If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code, [Section 626.611(4), Florida Statutes]; (bo) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; (c) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (d) | Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment, [Section 626.611(8), Florida Statutes]; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code, [Section 626.611(13), Florida Statutes]; (g) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. [Section Jun 1? 2008 15:28 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jun. 1? 2868 @2:35PM P14 626.621(2), Florida Statutes]; (h) ~—- Violation of the provision against twisting, as defined in Section 626.9541(1)(). [Section 626.621 (5), Florida Statutes); (i) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest. [Section 626.621(6), Florida Statutes]; (i) Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, commission, money, or other benefit from any insurer, agent, broker, or individual. [Section 626,9541(1)(k)1, Florida Statutes]; (k) Knowingly making any misleading representation or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer. [Section 626.9541(1)()), Florida Statutes]; qd) In recommending to a senior consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance transactions, an insurance agent, or an insurer if no insurance agent is involved, shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her Jun 1? 2008 15:29 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2688 @2:36PM P1is investments and other insurance products and as to his or her financial situation and needs. [Section 627.4554(4)(a), Florida Statutes]; (m) Before executing a purchase or exchange of an annuity resulting from a recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is involved, shall make reasonable efforts to obtain information concerning the senior consumer's financial status, tax status, and investment objectives and such other information used or considered to be reasonable by the insurance agent, or the insurer if no agent is involved, in making the recommendation. [Section 627.4554(4)(b), Florida Statutes]; (n) No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphict, letter or poster, or over any radio or television station, or in any other way, any advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance’ business, which is untrue, deceptive or misleading. [Rule 69B-215,230(2), Florida Administrative Code]. COUNT I 42. The above General Allegations are hereby realleged and fully incorporated herein by reference. 43, During or around September of 2005, using fraudulent misrepresentations and/or material omissions regarding the terms and conditions of annuities, you, DAVID LENFORD REEDY, exploited an elderly Stuart, Florida female, V.C., by influencing her to enter Jun 1? 2008 15:29 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + S584o7r4ogr Jun. 1? 2668 @2:36PM P16 4 inappropriate annuity investments that were unsuitable for her needs and that you, DAVID LENFORD REEDY knew were not suitable for V.C.’s needs. Further, the inappropriate annuity investments were not in V.C.’s best interest and-you, DAVID LENFORD REEDY, knew they were not in V.C.’s best interest. 44, At the time you, DAVID LENFORD REEDY, solicited and transacted insurance business with her, V.C. was eighty-one (81) years old. 45. You, DAVID LENFORD REEDY, were intraduced to V.C. by her previous insurance agent. You, DAVID LENFORD REEDY, went to V.C.’s home on multiple occasions during the time of your solicitation and transaction of insurance business with V.C. 46. During your solicitation, you, DAVID LENFORD REEDY, promoted transactions that involved the replacement of V.C.’s several annuities with a single annuity sold by a company or companies that you, DAVID LENFORD REEDY, represented. You, DAVID LENFORD REEDY, advised V.C, to enter the transaction with AEILIC, because she could “get a better rate” than she was receiving from her then-existing annuities. 47. As part of your sales presentation to V.C. you, DAVID LENFORD REEDY, told V.C. that she would receive a bonus without giving any details. This information was presented in such a manner as to lead V.C to believe that the bonus would be paid in cash. 48. As a result of your solicitation, V.C. signed an application dated September 15, 2005 for an annuity with AEILIC. V.C.’s application was eventually assigned policy contract #580982 by AEILIC, a company that you, DAVID LENFORD REEDY, represented. 49. You, DAVID LENFORD REEDY, did not make a reasonable effort to obtain accurate information regarding V.C.’s financial background, assets or investment objectives. In spite of this fact, you, DAVID LENFORD REEDY, entered information on the “suitability Jun 1? 2008 15:30 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2668 @2:36PM Pl? questionnaire” that was a part of V.C.’s application to AEILIC. The information you, DAVID LENFORD REEDY, entered on the V.C.’s “suitability questionnaire” was incorrect, and you, DAVID LENFORD REEDY, knew or reasonably should have known that it was incorrect. 50. You, DAVID LENFORD REEDY, entered the aforementioned incorrect information in order to gain approval for V.C.’s application or to disguise the unsuitability of the armnuity. $1. Eventually and without any help from you, DAVID LENFORD REEDY, AEILIC cancelled the annuity contract, at least in part because of the inaccuracy of the suitability information you, DAVID LENFORD REEDY, provided, and returned the premium paid by V.C. Nevertheless, V.C. lost at least three hundred sixty-two dollars and ninety-six cents ($362.96) in surrender charges on the annuities that you, DAVID LENFORD REEDY, advised V.C. to replace, This figure does not include tax penalties and subsequent opportunity costs. 52. Three hundred sixty-two dollars and ninety-six cents ($362.96) is a huge sum to V.C., because she nets ninety-two dollars ($92.00) a month from her social security check after her condominium maintenance fee is paid. 53. You, DAVID LENFORD REEDY, through the use of material omissions and fraudulent material misrepresentations upon which you knew V.C. would rely, and upon which V.C. did rely to her detriment, willfully persuaded V.C. that the appropriate investment for her needs was an equity-indexed deferred annuity from AEILIC. 54. As an unsophisticated investor, V.C. relied upon you, DAVID LENFORD REEDY, as a licensed insurance professional to act in her best interest and recommend suitable investments. 55. Without your elderly client’s understanding of the terms and conditions of the Jun 1? 2008 15:30 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 26658 @2:37PM Piss 4 investment you recommended, you, DAVID LENFORD REEDY, willfully advised V.C. to invest in an annuity with a 9% declining, ten year surrender charge, whereby her access to her money would be limited for the following ten years, or until V.C. would be 91 years of age. 56. You, DAVID LENFORD REEDY, were aware, or reasonably should have been aware, of all of the aforementioned circumstances, and you, DAVID LENFORD REEDY, willfully misrepresented and/or omitted pertinent and material facts in your interaction with V.C. in order to secure commissions for you or for Ameri-Life Polk on your behalf. 57, You, DAVID LENFORD REEDY, stood to personally profit through the transaction(s) with V.C. IT IS THEREFORE CHARGED that you, DAVID LENFORD REEDY, have violated or are accountable under provisions of one or more of the following: the Florida Statutes or the Florida Administrative Code, which constitute grounds for the suspension or revocation of your licenses as a Florida insurance agent: (a) If the license or appointment is willfully used, or to be used, to circumvent any of the requirements or prohibitions of this code. [Section 626.61 1(4), Florida Statutes]; (b) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.61 1(5), Florida Statutes]; (c) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (qd) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; Jun 1? 2008 15:30 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 2665 @2:3rPM Pilg (ce) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; (g) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or appointment. [Section 626,621(2), Florida Statutes]; (h) ‘Violation of the provision against twisting, as defined in Section 626,9541(1)(]). [Section 626.621(5), Florida Statutes]; (i) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public or detrimental to the public interest. [Section 626.621(6), Florida Statutes); q) Knowingly making a false or fraudulent written or oral statement or representation on, or relative to, an application or negotiation for an insurance policy for the purpose of obtaining a fee, coramission, money, or other benefit from any insurer, agent, broker, or individual. [Section 626.9541(1)(k)1, Florida Statutes]; (k) Knowingly making any misleading representation or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or Jun 1? 2008 15:30 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2688 @2:37PM Pea D to take out a policy of insurance with another insurer. [Section 626.9541(1)(1), Florida Statutes]; (i) In tecommending to a senior consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance transactions, an insurance agent, or an insurer if no insurance agent is involved, shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs, [Section 627.4554(4)(a), Florida Statutes]; (mm) Before executing a purchase or exchange of an annuity resulting from a recommendation to a senior consumer, an insurance agent, or an insurer if no insurance agent is involved, shall make reasonable efforts to obtain information concerning the senior consumer's financial status, tax status, and investment objectives and such other information used or considered to be reasonable by the insurance agent, or the insurer if no agent is involved, in making the recommendation. [Section 627.4554(4)(b), Florida Statutes]; (n) —_ No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, any advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or Jun 1? 2008 15:31 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2668 @2:38PM Pei h misleading. [Rule 69B-215.230(2), Florida Administrative Code]. WHEREFORE, you, DAVID LENFORD REEDY, are hereby notified that the Chief Financial Officer intends to enter an Order revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the provisions of Sections 626.611, 626.621, 626.681, 626.691, 626.692, and 626.9521, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. In addition, you are notified that the Department intends to seek aggravation of the total applicable penalties in consideration of the willfulness of your, DAVID LENFORD REEDY’S conduct, the age or capacity of the victims, and the degree of injury to the victims. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by: you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department of Financial Services ("Department") pursuant to Sections 120.569 and 120,57, Florida Statutes, and Rule 28-106, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel acting as Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. Jun 1? 2008 15:31 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2688 @2:38PM P22 YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A. PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU, If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, Florida Administrative Code, As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name, address, and telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent"). (b) The name, address, telephone number, facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. (c) A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate.. (d) A statement of when the respondent received notice of the administrative complaint. (e) A statement including the file number to the administrative complaint. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. | If a proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in 20 Jun 1? 2008 15:32 FROM :DEPT OF FINANCIAL SERVICES FAX NO. + 85845749? Jun. 17 28685 2:38PM P23 the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceédings are held before a State Administrative Law Judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department. Laker hdl DATED and SIGNED this (£4. _ day of (AKA? , 2008. R Deputy Chief Financial Officer KAREN CHANDLE 2] Jun 1? 2008 15:32 FROM : DEPT OF FINANCIAL SERVICES FAX NO. 285845 749R7? Jun. 17 2688 @2:39PM P24 CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and the following ELECTION OF PROCEEDING has been furnished to: DAVID LENFORD REEDY 227 Ruby Lake Lane Winter Haven, Florida 33884-3267 DAVID LENFORD REEDY c/o R. Nathan Hightower, Esq., MacFarlane, Ferguson & McMullen, P.A. 625 Court Street Clearwater, Florida 33756 this day of (iA Cet _, 2008. —SPenen A “SQ Waist fay Bue DL Thomas A. “Tad” David, Esq. Florida Department of Financial Services Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4164 Florida Bar Number 0706868 22

Docket for Case No: 08-002899PL