Equitable Financial Sanctioned by SEC for Misleading Investors About Fees
Investing your money doesn’t come without a price tag. There are fees and cost associated with investment products and services and in order to invest wisely an investor should thoroughly understand what they are paying in order for a firm to maintain their investments.
Asking questions about fees and your broker’s compensation is smart practice.
On July 18, the U.S. Securities and Exchange Commission (SEC) announced fraud charges against Equitable Financial Life Insurance Company and Equitable agreed to pay a $50 million penalty to settle those charges which claimed that Equitable misled investors regarding investor fees.1
The issue was that while Equitable did disclose some fees to investors on their quarterly variable annuity account statements since at least 2016, they did not disclose on those statements all fees that were paid.
In fact, the fees that were frequently reported were fees that investors infrequently incurred, and no fees were reported on most account statements sent to investors.
The affected investors were mostly public school teachers and staff members that were investing for their retirements. While Equitable Financial did not admit or deny the charges, the settlement includes a $50 million civil penalty which will be distributed by Equitable to affected investors. The company also agreed to improve the way fee information appears on the account statements.
Understanding fees is important when investing since over time those fees can add up and reduce the amount of money available to you. Investor.gov, an educational website operated by the U.S. Securities and Exchange Commission, reveals that over a 20 year period (from 2013 to 2033) a $100,000 investment, with fees of 0.50 percent will reduce the portfolio by $10,000.00 compared to a portfolio with a .25 percent annual fee and if the annual fee is 1.0 percent that reduces the portfolio by nearly $30,000.00.2
The www.investor.gov website provides advice on questions to ask about investment fees and about your investment professional’s compensation. It also includes information on various types of fees that are charged on investment accounts.
Do you know your rights as an investor?
Investment negligence is a complex matter that requires qualified legal capability to successfully deliver results. Investment brokers mismanage money all the time, by making unsuitable recommendations, over trading clients’ accounts and most of all by misleading and misinforming investors. This is where securities litigation can help by fighting for your rights.
Get the protection you need and deserve by seeking the advice of an experienced securities attorney. Our full-service Michigan Securities Law Firm has been helping people recover financial losses due to broker misconduct and negligence for more than 20 years. If you have questions or believe you have misled by an investment professional call for a Free case evaluation today.
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1 SEC Press Release: Equitable Financial to Pay $50 Million Penalty to Settle SEC Charges That It Provided Misleading Account Statements to Investors, 7/18/2022
Link: https://www.sec.gov/news/press-release/2022-124
2 Understanding Fees
Link: https://www.investor.gov/introduction-investing/getting-started/understanding-fees