Department of Insurance, Securities and Banking

DISB Orders Financial Services Agent to Pay Nearly $294,000 in Restitution and Fines for Exploiting Elderly Client

Monday, August 10, 2020

Washington, DC—The District of Columbia Department of Insurance, Securities and Banking (DISB) has ordered a financial services agent to pay $293,818 in restitution and fines for unethical practices, including unlawfully making himself the primary beneficiary of an elderly client’s death benefits. The agency also barred the agent from conducting business in the District.

DISB Commissioner Karima Woods issued a Final Decision and Order on June 22, 2020 in an action against Danny P. Divver of Laurel, Maryland. Divver was charged in Order No. SB-1516 (A) for unethical or dishonest practices, failure to adhere to written policies related to the conduct of broker-dealer agents and using Undue Influence to misappropriate the death benefits of a client to himself, in violation of the securities and insurance laws of the District of Columbia.

The Decision and Order found that in 2010, Divver advised his client, then 84 years old, to surrender her fixed annuity policy and put the net proceeds into a variable annuity. In 2014, a change of beneficiary form was executed that designated Divver as the primary beneficiary and his spouse and children as the contingent beneficiaries. At that time, the total value of the variable annuity policy was $531,761. In March 2015, the elderly client died. Divver submitted a claim for the death benefits of the policy. The insurer filed a court action in Baltimore, Maryland, asking the court to decide whether Divver or the client’s estate was entitled to the benefits of the policy. The parties settled the action and Divver received $233,818 in the settlement.

The recent Decision and Order finds that Divver obtained the proceeds of the policy by using unlawful means, as charged in the Notice of Intent. The Decision and Order directs Divver to pay restitution of $233,818, plus interest, to the estate of the client and to pay a fine of $60,000 to the District of Columbia; it also bars Divver permanently from conducting any securities or insurance business in the District of Columbia.

When she issued the Decision and Order, DISB Commissioner Woods said, “The Bowser Administration is committed to ensuring that District residents, particularly our senior citizens, are protected from unscrupulous financial practices. This case demonstrates that DISB will take strong action when anyone licensed by DISB takes financial advantage of District resident.”

Commissioner Woods urges any person who suspects that someone is taking financial advantage of an elderly District resident to report the suspicion to the Department’s Enforcement and Consumer Protection Division at (202) 727-8000.

About DISB

The mission of the Department of Insurance, Securities, and Banking (DISB) is three-fold:

(1) cultivate a regulatory environment that protects consumers and attracts and retains financial services firms to the District; (2) empower and educate residents on financial matters; and (3) provide financing for District small businesses.

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