FOR IMMEDIATE RELEASE
Wednesday, February 18, 2009
Contact: Laura Egerdal, (573) 526-0949
Contact: Ryan Hobart, (573) 526-4734
Carnahan Targets Sale of Variable Annuities to Missouri Seniors
Jefferson City, Missouri - Secretary of State Robin Carnahan is targeting the inappropriate sale of variable annuities to Missouri seniors. This week, officials in the Securities Division issued a series of consent orders that will return $140,000 to one widowed investor and assess $125,000 in penalties against financial advisors in Springfield and St. Louis for recommending unsuitable securities.
"Senior investors often need immediate access to their savings," cautioned Carnahan. "Variable annuities are complicated investments that can limit access to your money and often include high fees. It’s important to research any investment and make sure it is the right choice for you. In these tough economic times, my office will continue to protect Missouri seniors and their life savings."
One order involves an 85 year-old widow from St. Louis, Missouri. The widow wanted to invest the proceeds from the sale of her home to generate income for living expenses. Susan Coon, a registered representative working for Securian Financial of St. Paul, Minn., advised her to purchase an unsuitable variable annuity that she did not understand. Securian agreed to reimburse the widow over $140,000 and, pursuant to the order, the firm will pay over $79,000 in payments and costs.
Two additional orders involve investors from Springfield, Missouri, who were seeking additional income to meet their living expenses. Michael Bennitt, a registered representative of Raymond James Financial Services of St. Petersburg, Fla., advised the 78 and 79 year-old investors to sell stock and purchase a variable annuity. The investors’ ages, the length of time before they could surrender the annuity penalty-free, and the high percentage of the investors’ savings in the annuities made the recommendations inappropriate for these investors.
The Securities Division orders in these cases found that Raymond James failed to properly supervise Bennitt. Raymond James agreed to pay $50,000 to the Missouri Investor Education and Protection Fund. Bennitt was censured and will reimburse the Securities Division for some investigation costs.
These cases are part of a recent increase in variable annuities complaints and inquiries investigated by the Securities Division.
For more information regarding investments and fraud protection, visit the Secretary of State's online Missouri Investor Protection Center at www.MissouriSafeSavings.com or call the toll free Investor Protection Hotline at 1-800-721-7996.
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To find out more about Missouri’s Secretary of State’s office, visit www.sos.mo.gov
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