Waddell & Reed Settles Variable Annuity Policy Switching Complaint

Waddell & Reed has agreed to settle charges brought by Colorado securities and insurance regulators. Waddell will repay Colorado customers all surrender charges they incurred in switching variable annuity policies, and will compensate those who bought more expensive annuities by paying the difference.

This Colorado settlement follows a major settlement with the NASD in 2005. Waddell & Reed paid the NASD a $5 million fine and $11 million in restitution to injured customers for "engaging in a campaign to exchange the variable annuity contracts of thousands of customers without regard to the suitability of those switches."

Investors must be on guard as to the unsuitable sales and switches of variable annuity products.

Source: Denver Business News, May 4, 2006