Michael Howard first entered the securities industry in 1998 with SWS Financial Services, where he remained continuously employed until 2/17/11.  Currently, he holds Series 7, 24, 63, and 66 licenses.  On 2/17/11, SWS filed a Form U5 terminating his employment from the firm.  He's not currently associated with a firm registered with FINRA. Michael Ray Howard allegedly recommended that a customer have her trust purchase a $500,000 variable annuity that would make payments to her heirs; the purchase of a  $500,000 annuity, issued by an insurance company, would provide the customer’s heirs with a monthly income until a certain age. What Prompted Howard to Make the Recommendation. Prior to the transaction, the customer advised Howard that she owned rural real estate, which was held in the trust, and she believed that the property, following her death, could be sold for about $600,000.  With that in mind, Howard aggressively arranged for the trust to borrow $500,000 from a bank using the real estate as collateral for the loan, and used the proceeds to purchase the variable annuity.  The trust now had virtually all of its major assets encumbered to secure the loan, including the underlying variable annuity, because the market value of the property was only $375,000. Howard, for his excessively optimistic efforts, earned over $38.5K in commission on the sale of the variable annuity to the customer.  However, "taking the wind out of Howard's sail," FINRA didn't quite agree with Howard, taking the position that he knew, or should have known, that the cost of the annuity far exceeded the appraised market value of the real estate and the customer’s liquid assets, and that the customer could not pay for the V/A he recommended without borrowed funds secured in part by the annuity itself. Add to that the fact that FINRA also found that Howard did not have a reasonable basis for believing that his recommendation was suitable for the customer in light of her financial circumstances and needs.  Not only did his recommendation exceed the customer’s financial capability and exposed her to material risk, but FINRA determined that Howard completed the account documents and paperwork for the customer’s purchase of the V/A, including the V/A questionnaire, with false information about the trust’s net worth and source of funds. Howard provided the completed questionnaire containing the false information about the trust’s financial situation to his member firm, and the firm retained the document in its records.  Moreover, FINRA found that in reviewing and approving the annuity sale, Howard’s supervisor reviewed the V/A questionnaire.  Howard thus caused the firm’s books and records to be inaccurate and impeded supervision of the annuity sale. Alleged Violations, FINRA Sanctions. Howard was fined $40K and suspended 6 months in any capacity. For further details, go to:   [FINRA AWC #2008012282901].   [Disciplinary Actions for November 2011.]