Poor Record-Keeping Costs A.G. Edwards $755k

Former brokerage company A.G. Edwards will pay $755,000 to settle allegations of improper annuities sales in Missouri.

Missouri Secretary of State Robin Carnahan launched a probe of the company’s sales tactics after a complaint was filed by a Missouri resident. The resident’s identity has not been publicly released but Carnahan says the person is an 81-year-old living in the southwest area of the state.

The 81-year-old noticed irregularities after a variable annuity was liquidated. Carnahan’s office stepped in a short time later after being contacted.

The investigation by Missouri’s Securities Division eventually revealed that the company had sold variable annuities to investors but did not keep proper records of the sales. The deficient documents prevented the sales from complying with internal company policies and state law. The investors targeted for the sales were primarily elderly people who were unlikely to notice the lack of records.

The variable annuities in question were sold between July of 2006 and June of 2007. The sales took place across the entire state of Missouri. At least thirty-one investors held variable annuities that were affected by the lack of documentation. The investigation’s results led to a consent order between Carnahan and the company.

The settlement included in the consent order will be broken down into several chunks. A group of thirty-one investors in Missouri will receive $381,993. The Missouri Investor Education and Protection Fund will be paid $325,000. Missouri’s Securities Division spent $50,000 to investigate the complaint and will be reimbursed for the full amount.

Wells Fargo Advisors had acquired A.G. Edwards while the investigation was taking place. Spokeswoman Raschelle Burton says Wells Fargo believes that the settlement is fair and that the matter is now completely resolved. Wells Fargo Advisors believe they have solved the record-keeping problems that led to the complaint and investigation.

This entry was posted on April 29, 2011 at 11:30 am and is filed under Headlines. You can follow any responses to this entry through the RSS 2.0 feed.