HAVE YOU LOST MONEY IN A SUNLIFE OR AIG LIFE INSURANCE-DEDICATED FUND?

SunLife Insurance Company (SunLife) and AIG Life Ins. Co. (AIG), and other insurance companies have been engaged in the offer and sale of variable annuities and variable life insurance policies that are really investments in highly speculative hedge funds and private equity funds. These hedge funds and private equity funds are known as "insurance-dedicated funds." The manner in which these insurance-dedicated funds have been sold could be viewed as a false and misleading sales practice. Many investors may have been misled as to the relative safety of their investment when they bought what appeared to be a safe insurance type product that had been fully vetted by an insurance company.
Stockbrokers who offered and sold the SunLife and AIG insurance-dedicated funds were under a duty to only recommend these highly speculative funds to investors who were suitable to make the investment in light of their investment objectives and financial condition. Retail investors who had an objective of seeking an insurance type product would not be suitable investors in highly speculative hedge funds or private equity funds. The fact that these products were sponsored by insurance companies does not mean they were safe and suitable investments. We would not be surprised in learning that many investors were misled by their stockbrokers into purchasing insurance-dedicated funds.
Similarly, we would not be surprised to learn that SunLife, AIG and other insurance companies failed to do their due diligence in investigating the funds that were included in their variable annuities and variable insurance policies. Investors purchasing insurance policies are typically lulled into believing that the insurance company has done its job and is only offering safe products to investors with low risk tolerance. Many investors would be shocked to learn that insurance companies have failed to do their job when it comes to insurance-dedicated funds.
One example of an insurance dedicated fund disaster that was held in variable annuity contracts and variable life insurance policies purchased through SunLife, AIG and other insurance companies was the Strategic Stable Return Fund L. P. (SSR Fund). This was supposed to be a low risk capital preservation fund. However the SSR Fund lost over $100 million of investors' capital as a result of an investment in an affiliate run by an individual who was charged by the SEC with fraud. The SSR Fund also made other investments in feeder funds that invested in a Ponzi scheme.
Have you suffered losses resulting from an investment in a variable annuity contract or variable life insurance policy invested in an insurance-dedicated fund? Have you suffered losses as a result of an investment in a SunLife, AIG or other insurance company product that invested in the SSR Fund? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against SunLife, AIG and other insurance company affiliated stockbrokerage firms who fraudulently offered and sold the fund to investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

WAS FLORIDA BROKER DONALD HORRAS RUN OUT OF MORGAN STANLEY?

On November 8, 2012, stockbroker Donald Horras of Morgan Stanley Smith Barney transferred employment to Raymond James and Associates. Our law office is conducting an investigation and wants to know whether he was run out of Morgan Stanley or truly terminated his employment voluntarily? During the course of Mr. Horras career he was the subject of at least 7 customer complaints and one regulatory investigation. The customer complaints were generally made by elderly customers who claimed he made unsuitable recommendations of variable annuities that cause them significant losses to their retirement funds.
An annuity is a form of insurance that offers a series of payments for a period of time. Variable annuities are typically higher in risk when compared other types of annuities and depend on how the stock market is performing. Buyers have the option to allocate the cash invested into different types of assets such as mutual funds, indices, fixed income investments or bonds, and cash. Most variable annuities do not have principal protection, so investors can lose money if markets deteriorate.
The Law Offices of Robert Wayne Pearce P.A. is currently investigating Donald Horras' acts and omissions at Morgan Stanley Smith Barney and would be interested in speaking with anyone with the truth about Mr. Horras' sudden departure from that brokerage firm.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

LACK OF SUPERVISION AT BROKER-DEALERS POSES MAJOR CONCERN FOR FLORIDA INVESTORS

State securities regulators may be witnessing fewer problems with variable annuity sales, but they are continuing to see violations in certain areas of supervision at broker-dealers. This concern results from a review of 236 exams conducted during the first half of 2012. Regulators at the state level are worried that problems are arising as compliance resources at brokerage firms have been squeezed. Unfortunately, without a sufficient flow of resources going towards compliance, this trend will most likely continue.
The review conducted revealed the five most popular violations: 1) failure to follow written supervisory policies; 2) suitability; 3) correspondence/email; 4) maintenance of customer account information; and 5) internal audits. States found violations with written supervisory procedures in 24% of exams where such issues were reviewed - only 20% of the time when suitability was reviewed.
"We are concerned about [broker-dealers] having enough staff to service regulatory inquiries and [provide] customer service," said William Riley, special assistant to the director of Florida's Office of Financial Regulation. Mr. Riley added that "it is a concern, with the staff reductions at firms", and that "firms also are skimping on exception reports they buy from their clearing firms."
Industry compliance personnel have been warned by the Florida regulator to make sure they speak with customers who have a complaint, rather than just their broker. This would require branches to beef up branch audits and to follow up to make sure problems are taken care of. In many cases, no meaningful branch audits are being conducted.
On a good note, variable annuity violations have decreased since a similar review conducted in 2010. Only two years ago, variable annuity violations were third on the list of violations. This year, variable annuity violations fell to ninth place. This is probably due to the fact that variable annuity sales have substantially slowed within the last three or four years.
Have you made a complaint to your financial advisor or broker-dealer that has not yet been addressed? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

WATCH OUT FLORIDA RETIREES--HIGHER YIELDS INVOLVE GREATER RISK

The prospect of several more years of extremely low interest rates is causing people who depend on interest income to accept Wall Street's recommendations to purchase relatively illiquid and opaque alternative investments like structured products, non-traded REITs, hedge funds and variable annuities. ("Itchy Investors Ramp Up the Risk," Wall Street Journal). Regulators worry that the increased risks associated with such investments are not being explained to investors.

Interest income is down nearly one-third from peak levels in the third quarter of 2008, according to the article. Four-year certificates of deposit are paying an average of 0.88 per cent while inflation is about 2 percent. The last prolonged period of low interest rates occurred 60 to 70 years ago when one-month Treasury bills paid 0.7 percent versus a 5.9 percent inflation rate, according to the article.

Stock market volatility is also subject to extreme levels. In 2011, stocks finished the year "relatively flat" after gyrating wildly. In May 2009, the "flash crash" churned investors' stomachs as the Dow lost 1,000 points in minutes.

The wizards of Wall Street continue to churn out structured products, hedge funds, exchange traded products and other alternative investments to enable investors to chase yield despite warnings from the Financial Industry Regulatory Authority (FINRA) that they should not encourage investors to chase yield because of the risks involved.

Individual investors chasing yield are not the only ones who could get burned. Low interest rates are also "pressuring life insurance companies" to chase yield and some life insurers may be taking on more risk than they should.

All investors should remember that increased yields invariably mean increased risk. There simply is no free lunch.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.