two thousand and seven some of these clients testified that they came to him during the earlier they had stocks they had securities they wanted to sell those so he sold those and he purchased facilitated the purchase of acting as a registered investment advisor and as we point out in in our brief when you look at the definition of a rush to the best an advisor it you have to be doing something connection with securities now only and a license preacher can sell these kinds of annuities there's no question about that only a license or insurance producer can give any advice or recommendation it would be a violation of the securities code for an investment advis act and they've been heavily regulated by the interest of part period there are extensive regulations that deal with suitability requirements with hop out of the training that insurance producers have to have  to go through every conceivable aspect of these new is regulated by the department of the church and these and duty contracts are defined under the church code ask insurance products so there is simply nothing in the app the only regulation that they claim was violated is one thirty point five three now that's in our brief it's it's in our appendix that a seventy seven one thirty point eight five three account transactions affecting are causing to be affected or for any clients out any regulations around this deals with invest it securities clients who have given them over to an investment advisor to make trades for or to deal in securities  example i mean we have in this case that the partner charters went in because of the complaint that apparently related to the clique file what was that complaint well it's not clear from the record it's the only person to testify to it i mean we don't to make trades you know and that's what this is talking about you make a whole bunch of trades and individuals account make a whole bunch of commissions that's not in their interest or it's unsuitable that's what these regulations are designed to deal with but they have nothing no was a consent order in which there was a consent order with no admission of liability where mr and i agreed to pay six thousand dollars be with respect with respect to various forms that were filled out allegedly what was the evidence relative to the financial detriment to each of the younger clients sprite sheets that were prepared by an auditor who was directed by the prosecutor how to prepare those spreadsheets he was directed not to include the bonus feature the bonus about sitting there when calculating boss when asked about that or cross examination and he got a spurious expert he doesn't have a license and security she knows nothing about insurance products he's an author he's he has a two year degree from the land in town he prepared the spreadsheet so we asked well why didn't you include the bonus features why did you include the bonus well because i was instructed by the prosecutor who went on got a ph d in fine from another state ok it comes down and he looks at ten to fifteen pages of these documents and he says these were not in their best actress now nineteen of those files i mean you look at you can look at those charge too much free to contract so they come in the air to see him look at it they say well that's fine but i don't look at all your other breach of contract cases and so they look at a hire some experts say oh the average case you charge too much for that so therefore this is fraud that's the some substance of what this is i mean absolutely no individualized analysis you know o'neill testified we laid out in our brief in some detail how those numbers or no relationship to reality he came up sent to that of the clients specifically disclose what the m b a was specifically disclosed what that surrender was specifically the sloth what the surrender fee charge was now here's what they did in this case i mean the same types of the newbies to twelve insurance yes in this case a rubberstamp three hundred thirty thousand dollars of fines against my client i mean if you're honest i'm aware that all three of cards there's no evidence that any of them were dissatisfied or any of them made a complaint in this case yet palmer securities comes in with this bogus analysis by o'neill which spares no walmart corrected well you said in your proof i want to make sure i'm understanding this when only it was asked questions about her yes the prosecutor objected saying there's no thorough we want home we thought we considered we know what the surrender fees were we do with the n b a that we were explained that it was in the contract we read the contract we talked about it my husband talked about we love fish he's a great guy he all this time to explain all this to they don't believe they were brought it this is the first time in history of this state that i'm aware where an administrative agency has come in and said these twenty one people generated from the surrender of a policy because the way i read it what happened here is mr van dyke had clients read her policies and got a commission in doing that then having them buy the new from the right by selling these villagers that every assurance producer out there is going to subject the people and you know it's well to extend that i mean it sounds like you're describing a situation where go to him and i say good i want to surrender this and i want to get something else you know we putting him in a situation where he's honoring the wishes of the holder of these investments and he's been accused of doing because to hear i don't know maybe i'm just too simple that makes sense to me well there's nothing unique or strange about having the same transaction of the same financial instrument regulated under more than one regulatory regime at a time whether it's by have an interest in  decisions founds hybrid these hybrid financial contracts these securities are in the name of the federal securities act which our definition of securities and investment contracts in pattern is pattern they look at this if you look at the economic realities of the hybrid contract that is that does it raise to the economic realities of back country is it raising kinds of concerns that are addressed by the security slice and where it is being in when it's something that is being sold when it is governed by whether that whether that transaction or that instrument is furious within stat meaning of the statute i just want to clarify something with we're back to the code first of all we don't dispute that the insurance covers these equity index annuities that is that ministry of code section three one two zero point forty that's the definitions just lists basically the suitability standards factors like looking at what is to finance what is the financial condition of what your own witness said had to  though they were they looked at aspects the policies ordered to what they did they didn't look at all the policies and all the different features of the suitability standards and those features are not a shield against the front claim there is a standard which i'll simply simply requires look if we want  eight subsection a which says it requires the producer when they're selling it to consider whether it's a cap to make sure they have reasonable grounds to believe that it's suitable for their for their client that they're selling it to that's it is a bare basic it's a floor subsection for replacement transactions like these here it says you have to make sure that you consider what aspects as it listed it says when you consider the surrender charges that are being posed for that replacement transaction the new barber surrender period that the there is any financial detriment to these investors and specifically the end but instead was presented in the lack of consideration of a bonus what puts your response to that i mean do we have a clear picture of truly whether or well and i don't see where you responded to your we do actually directly respond to it but the o'neill specifically did not he testified that he was providing protection orders assuming a three percent credit i want to get a new annuity and he is under no obligation make sure that the replacement transaction he's going to recommend to him that he's going to facilitate is in his interest of peace found one which is actually in your interest with some new annuity or some other you investment regulators insurance they're going to raise the kinds of considerations specifically that we're worried about it and are pertinent to bet and five patients thank you for the reason set forth in our previous we ask that you affirm the decision of the absolutely nothing to do with what secures and to your point well and you ask questions about the regulation i'm not quite sure i we didn't charge him that we charged with violating section one thirty point one five three well which is so so now they're saying oh we prove that there was a violation of the insurance co i mean if it's not there it's nowhere in the record there's no testimony of all of section two point one it contains a long list but again section two point one again it's a base amount certificate is the only place it's m ask about decision that's the ironic thing about cyrano decision the only person who was ever tempted to do this is the prosecutor in this case to case and i say you need to settle for what the law is on this so you put a