The SEC Just Hit Equitable Life with a $50 Million Fine
You know, there are two particular products that are really hot and popular in today's rising rate environment and market declines and volatility and all that kind of good stuff. One of them is annuities. You're really interested in annuities. The annuity sales have been skyrocketing this year because people are looking for two things. One, a guarantee that they won't lose money. And number two, a good interest rate better than what they can get in a bank account.
Well, watch out. You need to be careful because you're not always getting what you think you're getting. Equitable Life Insurance has just been nailed with a $50 million fine by the SEC. The SEC says Equitable Life has been making misleading statements about the fees that it charges for its variable annuity since 2016. The SEC says Equitable failed to list all the fees that investors pay on the quarterly statement. This has affected 1.4 million investors, mostly schoolteachers saving for retirement. The SEC says that Equitable sent statements every quarter to the schoolteachers, and those statements showed the fees as zero - more often than not, the SEC says. In fact, the annuity had a separate account fee of up to one and a half percent plus portfolio operating fees of up to two and a quarter percent, plus other fees, termination fees, transfer fees, loan origination fees. So instead of saying the truth - that these schoolteachers are paying 3% or 4% to own this annuity, they were being told every quarter that the fees are zero. Flat out lying, says the SEC.