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FINRA Fines VALIC Financial Advisors $1.75 Million in Variable Annuity Sales


FINRA Fines VALIC Financial Advisors $1.75 Million in Variable Annuity Sales

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FINRA Fines VALIC Financial Advisors $1.75 Million in Variable Annuity Sales

FINRA Fines VALIC Financial Advisors $1.75 Million Regarding Variable Annuity Sales and Other Allegations


FINRA (the Financial Industry Regulatory Authority) recently brought a regulator action against VALIC Financial Advisors for the sales of multi-share class variable annuities.  VALIC Financial Advisors, which is a Houston, Texas-based securities brokerage firm, was alleged to have violated securities rules and regulations in several aspects, including: a) failing to address conflicts of interest in its compensation policy; b) systemic failures in the supervision of certain aspects of sales of variable annuities; c) failure to establish written supervisory procedures relating to the sale of multi-share class variable annuities; d) failure to enforce its written supervisory procedures related to reviews of emails; and e) failures related to customer complaint reporting.


Multi-Share Class Variable Annuity Sales


According to FINRA’s allegations, VALIC Financial Advisors failed to maintain an adequate supervisory system to detect red flags associated with selling multi-share class variable annuities.  VALIC was selling L-share annuities, which typically have a shorter surrender period (usually 3 to 4 years) than B-share annuities, which often have 7 year surrender periods.  However, the L-share variable annuities typically have higher annual fees.  For an investor who held the L-share annuities longer than the surrender period, they were paying higher fees than what they needed.  According to Investmentnews.com, some firms have ceased sales of L-share annuities.


FINRA alleged that VALIC’s training materials failed to educate its advisors on the features of the various variable annuity share types.  To settle these allegations, VALIC agreed to pay a fine of $1,750,000.


Our attorneys have represented over one thousand investors who have been defrauded by financial advisors and brokerage firms.  While we have offices in Denver and the Seattle area, we have also previously represented clients throughout the country, including former clients of VALIC Financial Advisors who lost money with Jodie Miller.


Click to view:  VALIC FINRA AWC




             Aaron Israels: (720) 599-3505

             David Neuman: (206) 795-5798


Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency.  Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency.  All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact.  This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice.  Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis.  In contingent representation, clients may still be liable for costs.



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