Equitable settles with SEC for $50 million over misleading annuity statements

The Securities and Exchange Commission announced fraud charges against Equitable Financial Life Insurance Co. for providing false statements to approximately 1.4 million variable annuity customers.

The SEC order states that that since at least 2016, Equitable had given investors the incorrect impression that their quarterly account statements showed all the fees they had paid during the period. According to the SECs findings, the statements actually listed only certain types of fees that investors rarely experienced. The statements tended to list fees of $0.00 when that wasn’t truly the case.

The SECs order finds that Equitable violated the antifraud provisions of the Securities Act of 1933.

Equitable consented to settle the charges by providing $50 million in compensation to affected investors, most of whom are public school teachers and other employees of public school districts who invest in Equitables proprietary Equi-Vest variable annuities within 403(b) or 457(b) defined-contribution retirement plans.

Since 2016, approximately 60% to 65% of Equitables annual revenue from Equi-Vest variable annuities originated from investments made by teachers or other employees of K-12 public school districts, according to the SEC order.

“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,” Gurbir S. Grewal, director of the SECs Division of Enforcement, said in the statement. “This case should serve as an important reminder to investment firms to carefully review their statements to ensure fee information is disclosed properly.”

In addition to the $50 million civil penalty, Equitable agreed to cease and desist from committing or causing any future violations without admitting or denying the SECs findings. The company also agreed to modify the presentation of its fee information in its variable annuity account statements.

We didnt live up to our own high standards and our clients expect more from us. We are committed to learning from this, continuously enhancing our clients experience, and always providing clear and transparent communications, said an Equitable spokesperson.