The Securities and Exchange Commission has charged Equitable Financial Life Insurance Company with fraud after the company allegedly provided account statements to roughly 1.4 million variable annuity investors that included misleading statements and omissions concerning investor fees.
Equitable agreed to pay $50 million to harmed investors, mostly public school teachers and staff members, to settle the charges.
According to the SEC, since at least 2016, Equitable gave investors the false impression that their quarterly account statements listed all fees paid during the period. The SEC’s investigation found that the statements only listed certain types of fees that investors infrequently incurred, and that more often than not, the statements had $0.00 listed for fees.
“When considering how to invest their hard-earned money and save for retirement, it is essential that investors not be misled about the fees they are paying,” said Gurbir S. Grewal, director of the SEC’s division of enforcement. “This case should serve as an important reminder to investment firms to carefully review their statements to ensure fee information is disclosed properly.”
The SEC’s order finds that Equitable violated the antifraud provisions of the Securities Act of 1933. Without admitting or denying the findings, Equitable agreed to cease and desist from committing future violations and to pay a $50 million civil penalty that it will distribute to affected investors. Equitable also agreed to revise how it presents fee information in its variable annuity account statements.