FILED CHIEF FINANCIAL OFFICER APR 0.1 2013 JEFF ATWATER Docketed by E20, STATE OF FLORIDA IN THE MATTER OF: CASE NO. 125780-13-AG DAVID JOHN GRAHAM / ADMINISTRATIVE COMPLAINT TO: DAVID JOHN GRAHAM 200 Frandorson Circle, Ste. 101 Apollo Beach, FL 33572 You, DAVID JOHN GRAHAM, 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, You, DAVID JOHN GRAHAM, are currently licensed in the state as a life including variable annuity insurance agent, life insurance agent and health insurance agent. 2. At all times pertinent to the dates and occurrences referred to in this Administrative Complaint you, DAVID JOHN GRAHAM, were licensed as an insurance agent in this state. ) ) 3. Pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida and the Department of Financial Services has jurisdiction over your insurance licenses and your eligibility for licensure and appointment. COUNT I 4. The above General Allegations numbered one through three are hereby realleged and fully incorporated herein by reference. 5. As of August, 2009, L.K.S. of Bradenton, Florida, a senior consumer, had an Ameriprise Financial Insurance (Ameriprise) annuity in effect with a contract value of $47,120.62 This annuity had been purchased in 2006. 6. On or about August 13, 2009, you, DAVID JOHN GRAHAM, induced L.K.S. to surrender her above mentioned Ameriprise annuity and utilize the contract values to purchase an Allianz annuity. 7. The Allianz annuity application submitted by you, DAVID JOHN GRAHAM, asks the question “To the best of [your] knowledge, the applicant DOES OR DOES NOT have existing life insurance or annuity contracts and the insurance applied for will not replace existing insurance” in compliance with Rule 69B-151.005, Florida Administrative Code. The question is answered in the negative. This answer is false and a material misstatement of fact. You, DAVID JOHN GRAHAM, were aware of this misstatement at the time you submitted the application. 8. The Allianz annuity application submitted by you, DAVID JOHN GRAHAM, asks the question “will the annuity contract applied for replace or change existing contracts or policies” in compliance with Rule 690-151.005, Florida Administrative Code. The question is answered “NO”. This answer is false and a material misstatement of fact. You, DAVID JOHN GRAHAM, were aware of this misstatement at the time you submitted the application. 2 ) ) 9. You, DAVID JOHN GRAHAM, failed to present to L.K.S. or to file with the insurer a “Notice to Applicant Regarding Replacement of Life Insurance” at the time you submitted the application in violation of Rules 690-151.005 and 690-151.006(3), Florida Administrative Code. 10. The mistepresentations and omissions, made by you, DAVID JOHN GRAHAM, described herein were false and material misstatements of fact. You, DAVID JOHN GRAHAM, were fully aware of these facts. 11. The conduct and actions describe herein constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes. 12. L.K.S. justifiably relied on the representations and information conveyed to her by you, DAVID JOHN GRAHAM, concerning the annuities. The annuities would not have been purchased but for these representations. 13. The sale of the of the Allianz annuity to L.K.S. and the replacement of her Ameriprise annuity and the subsequent assessment of penalties was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstance, was without demonstrable benefit, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from an insurance company. 14. You, DAVID JOHN GRAHAM, did not have any reasonable grounds for believing that your recommendation to purchase the Allianz annuity and the replacement of her Ameriprise annuity was suitable for L.K.S. on the basis of the facts disclosed by L.K.S. as to her investments and as to her financial situation and needs at the time of purchase. 15. You, DAVID JOHN GRAHAM, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code which provides: 3 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. - As aresult, L.K.S, has suffered financial harm. IT IS THEREFORE CHARGED that you, DAVID JOHN GRAHAM, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your license(s) or appointment(s) as an insurance agent in the state: (a) Section 626.611(5), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to, either in person or by any form of dissemination of information or advertising, willfully misrepresent any insurance policy or annuity contract, or willfully deceive with regard to such policy or contract. (b) Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (c) Section 626.611(9), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. ) ) (d) Section 626.611(13), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to willfully fail to comply with, or willfully violate, any proper order or rule of the department or any provision of this code. (e) Section 626.621(2), Florida Statutes, which provides that violating any provision of this Code or any law applicable to the business of insurance in the course of dealing under the licensure or appointment is, in itself, a violation of law. (f) Section 626.621(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, in the conduct of business under the license or appointment, to engage in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise show oneself to be a source of injury or loss to the public interest. (g) Section 626.9541(1)(a)1., Florida Statutes, which provides that it is an unfair method of competition and an unfair or deceptive act or practice, violative of Section 626.9521, Florida Statutes, to knowingly make, issue, circulate, or cause to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. (h) — Section 626.9541(1)(e)1.a., Florida Statutes, which provides that it is an unfair method of competition and an unfair or deceptive act or practice, violative of Section 626.9521, Florida Statutes, to knowingly file with any supervisory or other public official any false material statement. ) ) @ Section 626.9541(1)(), Florida Statutes, which provides that it is an unfair method of competition and an unfair or deceptive act or practice, violative of Section 626.9521, Florida Statutes, to 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. q) Section 627.4554(4)(a), Florida Statutes, which provides that when 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. (k) — Rule 690-151.009 which provides that it is a violation to fail to comply with the requirements of Rule 690-151, Florida Administrative Code. COUNT II 16. | The above General Allegations numbered one through three are hereby realleged and fully incorporated herein by reference. 17. As of September, 2009, D.T. of New Port Richey, Florida, a senior consumer, had an AVIVA Insurance annuity in effect with a contract value of $26,806.00 This annuity had been purchased in 2006. 18. On or about September 9, 2009, you, DAVID JOHN GRAHAM, induced D.T. to surrender her above mentioned AVIVA annuity and utilize the contract values to purchase an Allianz annuity. 19. The Allianz annuity application submitted by you, DAVID JOHN GRAHAM, asks the question “To the best of [your] knowledge, the applicant DOES OR DOES NOT have existing life insurance or annuity contracts and the insurance applied for will not replace existing insurance” in compliance with Rule 69B-151.005, Florida Administrative Code. The question is answered in the negative. This answer is false and a material misstatement of fact. You, DAVID JOHN GRAHAM, were aware of this misstatement at the time you submitted the application. | 20. The Allianz annuity application submitted by you, DAVID JOHN GRAHAM, asks the question “will the annuity contract applied for replace or change existing contracts or policies” in compliance with Rule 690-151.005, Florida Administrative Code. The question is answered “NO”. This answer is false and a material misstatement of fact. You, DAVID JOHN GRAHAM, were aware of this misstatement at the time you submitted the application. 21. On or about November 5, 2009, you, DAVID JOHN GRAHAM, submitted to the insurer, along with the annuity application, a “Product Suitability Form” signed by you. Question “4” asks if this transaction involves replacement of an annuity. The question is answered “NO”. Question “4b” asks if there is any surrender penalty being assessed. The question is answered “NO”. These answers are false and material misstatements of fact. You, DAVID JOHN GRAHAM, were aware of these misstatements at the time you submitted the application. 22. You, DAVID JOHN GRAHAM, failed to present to D.T. or to file with the insurer a “Notice to Applicant Regarding Replacement of Life Insurance” at the time you submitted the application in violation of Rules 690-151.005 and 690-151.006(3), Florida Administrative Code. 7 ) ) 23. The misrepresentations and omissions, made by you, DAVID JOHN GRAHAM, described herein were false and material misstatements of fact. You, DAVID JOHN GRAHAM, were fully aware of these facts. 24. The conduct and actions describe herein constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes. 25. -D.T. justifiably relied on the representations and information conveyed to her by you, DAVID JOHN GRAHAM, concerning the annuities. The annuities would not have been purchased but for these representations. 26. The sale of the of the Allianz annuity to D.T. and the replacement of her AVIVA annuity and the subsequent assessment of penalties was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstance, was without demonstrable benefit, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from an insurance company. 27. You, DAVID JOHN GRAHAM, did not have any reasonable grounds for believing that your recommendation to purchase the Allianz annuity and the replacement of her AVIVA annuity was suitable for D.T. on the basis of the facts disclosed by D.T. as to her investments and as to her financial situation and needs at the time of purchase. 28. You, DAVID JOHN GRAHAM, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code which 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 8 ) ) competitors always placing the policyholder’s interests first. As aresult, D.T. has suffered financial harm. IT IS THEREFORE CHARGED that you, DAVID JOHN GRAHAM, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your license(s) or appointment(s) as an insurance agent in the state: Sections 626.611(5)(7)(9) and (13); 626.621(2) and (6); 626.9541(1)(a) and (e)(1); 627.4554(4)(a), Florida Statutes and Rule 690-151.009, Florida Administrative Code as more particularly alleged in Count I above. WHEREFORE, you, DAVID JOHN GRAHAM, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses, appointments and your eligibility for licensure as an insurance agent in this state 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. 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 Julie Jones, DFS Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 9 200 East Gaines Street, Tallahassee, Florida 32399-0390. 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. FAILURE TO ENSURE YOUR WRITTEN RESPONSE IS RECEIVED 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. 10 ) ) 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 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 proceedings 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. 11 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. . st Ave DATED and SIGNED this_ >" dayof__R ors \ , 2013. KS = Director, Agent and Agency Services _ CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished by Electronic Mail and Certified Mail to: DAVID JOHN GRAHAM, DAVIDJOHNGRAHAM@aol.com , 200 Frandorson Circle, Ste. 102, Apollo Beach, FL 33572, on this st day of Aor \ > 2013. 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4124 12 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: DAVID JOHN GRAHAM CASE NO.: 125780-13-AG ELECTION OF PROCEEDING I have received and have read the Administrative Complaint filed by the Florida Department of Financial Services ("Department") against me, including the Notice of Rights contained therein, and I understand my options. | am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1.(] I do not dispute any of the Department’s factual allegations and I do not desire a hearing. I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my licenses and appointments as may be appropriate. 2. I do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120.57(2), Florida Statutes, In this regard, I desire to (CHOOSE ONE): {] Submit a written statement and documentary evidence in lieu of a hearing; or {] Personally attend a hearing conducted by a department hearing officer in Tallahassee; or [] Attend that same hearing by way of a telephone conference call. 3. [ ] I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. I have attached to this election form the information required by Rule 28-106.2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights. Specifically, I have identified the disputed issues of material fact. TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. The address for filing is: Julie Jones DFS Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Signature Print Name Date: Address: Date Administrative Complaint Received: if you are represented by an attorney or qualified Phone No.: representative, please attach to this election form his or her name, address, telephone and fax numbers Fax No.: 13

Docket for Case No: 13-002025PL