Equitable to Pay $50 Million Over Misleading Statements on Annuity Fees
From the Desk of Jim Eccleston at ÍøÆسԹÏ.
The Securities and Exchange Commission (SEC) has filed fraud charges against Equitable Financial Life Insurance Co. for furnishing account statements to nearly 1.4 million variable annuity investors containing materially misleading statements as well as omissions regarding investor fees.
In an effort to settle the charges, Equitable has agreed to pay $50 million to harmed investors, which primarily include public school teachers and staff members. According to the SEC, Equitable falsely informed investors that their quarterly account statements listed all fees paid during the period since at least 2016. According to the SEC’s order, Equitable “presented fees in several sections of its EQUI-VEST variable annuity account statements, including dollar values spread across various columns and rows, creating the false impression that all fees investors paid during the period were being detailed in the account statements.”
Additionally, the SEC alleged that Equitable’s account statements failed to detail the most substantial fees that investors paid during the period. Alternatively, the account statements listed only certain types of administrative, transaction and plan operating fees, which constitutes only a small fraction of the total fees paid by the investor, according to the SEC. In addition to paying a $50 million civil penalty, Equitable has agreed to review and alter how it presents fee information to variable annuity investors.
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