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May 18, 2021 by |

Napa County and California Financial Elder Abuse Attorneys: Insurance Products And Recurring Sales Practices That Defraud Seniors

ATTORNEY NEWSLETTER

SEC Alert: Stories From The Front Line

Major Red Flag: Spectacular Returns and “Guarantees”

Seek Help If You Have Been Defrauded

One significant forms of financial elder abuse is the sale to seniors of unsuitable insurance products.  These products, such as deferred annuities and some unsuitable life insurance policies, generate sizeable commissions for agents but may result in serious economic harm for seniors. The U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) are aware of the possibility of harm to seniors from these products and have issued a joint alert to warn seniors of the potential dangers of certain products and share instances from actual cases of harm to elderly investors.  We encourage you to read the alert if you have been approached with annuities or other insurance products recently or some other investment promising a high return.  These are volatile times in U.S. markets and agents seize on market anxiety in sales approaches. If you are over 60, live in Napa or elsewhere in California and have experienced an economic loss as a result of the sale of an unsuitable annuity or other investment product, call us today at 415-441-8669 (or toll free at 1-888-50EVANS) for a free review of your policy. 

Unsuitable Annuities and “High Return” or “Risk-Free” Investments

The SEC and FINRA recently shared some examples of cases[1] involving unsuitable annuities or other investments sold to seniors and the list of examples is useful in spotting some common red flags and common denominators in these cases of financial elder abuse or fraud:

  • FINRA barred an investment adviser from association with any FINRA-regulated securities firm and ordered the adviser to pay more than $1.5 million in restitution to seniors and other customers for unsuitable sales of annuities and mutual funds totaling over $6 million.
  • FINRA fined a financial services firm, $2.75 million for failing to maintain an adequate supervisory system to oversee the annuity sales activities of over 1,000 branch managers. working in offices throughout the United States. In a related action, FINRA permanently barred one of those branch managers because the manager recommended unsuitable variable annuity products to seniors and made misleading statements to customers in correspondence.
  • FINRA fined an investment services firm, $850,000 for supervisory, recordkeeping, telemarketing, and other violations. The firm had failed to implement proper procedures for selling annuities to seniors.
  • The SEC obtained a $112 million judgment against investment advisers who induced at least 803 seniors to invest in notes that purportedly paid a “guaranteed” return of 5.5% to 8% per year. The fraudsters claimed that investor funds would be used to make secured loans to businesses and that investors would be repaid their principal at maturity, but these representations were false.
  • State regulators sued two insurance agents who convinced clients to liquidate annuity investments and invest in a bogus real estate company by promising returns of up to 9%.

Avoiding Fraud and Financial Elder Abuse

Unscrupulous agents or financial advisors are particularly successful in preying on older investors who do not have someone to discuss business matters with before they make a decision. The results can be disastrous financially.  Some investments may be entirely fraudulent as in Ponzi schemes.  Other investments may be entirely unsuitable for the senior consumer and extremely expensive to get out of as is the case with deferred annuities.  Any of these investments may also result in tax liabilities.  If you are a senior, always get a second opinion on any investment proposal from a professional with nothing to gain from a sale.  Also always consult your tax advisor before making any purchase or exchanging, surrendering or withdrawing from any annuity.  All annuity transactions have tax consequences.

Contact Us

Ingrid M. Evans and Evans Law Firm represent seniors who have been sold an unsuitable annuity, or where the agent has sold a senior on a replacement or exchange that has resulted in a loss.   If you are over age 60 and have lost money as the result of a deferred annuity transaction or surrender in Napa County or elsewhere in California, you can reach Ingrid at (415) 441-8669 (or toll free at 1-888-50EVANS)  or by email at <ahref=”mailto:info@evanslaw.com”>info@evanslaw.com</a>..

Some significant issuers and distributors of fixed, variable and fixed indexed deferred annuities in California are listed below.  We are not in any way suggesting that any of these carriers or distributors has done anything wrong.  The list is provided solely as a reference for our readers.

AIG/American General Life Insurance Company

Allianz Life Insurance Company of North America

American Equity Investment Life Insurance Company

American General Life Insurance Company/AIG

American International Group, Inc. (AIG)

American National Life Insurance Company

Athene Annuity & Life Assurance Company

Athene Annuity and Life Company

Athene USA

Aviva Life Insurance Company

AXA Equitable Financial Services, LLC

AXA Equitable Life Insurance Company/AXA US

AXA Advisors, LLC

Brighthouse Financial, Inc./MetLife

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Genworth Financial, Inc.

Genworth Life and Annuity Insurance Company

Genworth Life Insurance Company

Guggenheim Partners, LLC

Guggenheim Partners/Security Benefit Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Lincoln Benefit Life Company

Lincoln Financial Group

Massachusetts Mutual Life Insurance Company

Metlife/Metropolitan Life Insurance Company/Brighthouse Financial, Inc.

Minnesota Life Insurance Company

Nationwide Investor Services Corporation (NISC)

Nationwide Life and Annuity Insurance Company

Nationwide Life Insurance Company

New York Life Insurance Company

Northwestern Mutual Investment Services, LLC

Northwestern Mutual Life Insurance Company

Northwestern Mutual Wealth Management Company

Pacific Life & Annuity Company

Pacific Life Insurance Company

PacLife

Security Benefit Corporation

Security Benefit Group, Inc.

Security Benefit Life Insurance Company/Guggenheim Partners

Security Investors, LLC

Security of Denver Life Insurance Company/Voya

Transamerica Life Insurance Company

Voya Financial Advisors

Voya/Reliastar Life Insurance Company

World Financial Group Insurance Agency, Inc.

[1] We encourage you to read the SEC/FINRA Alert here to learn more: Investment Products and Sales Practices Commonly Used to Defraud Seniors: Stories from the Front Line (sec.gov).  Evans Law Firm, Inc. was not involved in any of the reported examples.

 

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