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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MetLife Inc | NYSE:MET | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.28 | 0.40% | 70.52 | 70.76 | 69.19 | 70.29 | 3,361,218 | 01:00:00 |
By Aruna Viswanatha
MetLife Inc. agreed to pay $25 million for allegedly misleading customers about retirement-income products, regulators said Tuesday, in one of the largest such settlements to date.
The insurer's MetLife Securities Inc. unit "made negligent misrepresentations and omissions to customers" when replacing their variable annuities between 2009 and 2014, making them seem better for the customers than they actual were, the Financial Industry Regulatory Authority said.
MetLife neither admitted nor denied the Wall Street watchdog's findings, according to the settlement. In a statement, MetLife said it "fully cooperated with the FINRA investigation."
Variable annuities are products popular with older, risk-averse investors that offer tax advantages to invest in stock and bond funds. For an added fee at many insurers, investors can receive lifetime payments of a guaranteed-minimum amount even if the underlying funds perform poorly.
The regulator said the settlement, which includes a $20 million fine and $5 million to reimburse customers, is the second largest fine it has ever levied. The largest, a $50 million penalty against Credit Suisse First Boston Corp. over allegedly inflated commissions for hot initial public offerings, came in 2002.
According to the Tuesday settlement, MetLife sometimes overstated the cost of a customer's existing variable annuity contract, which in some instances increased a customer's cost by 2% annually. The firm also sometimes failed to tell customers a proposed replacement would reduce or eliminate features of their existing variable annuity, Finra said.
"Variable annuities are complex and expensive products that are routinely pitched to vulnerable investors as a key component of their retirement planning," Finra enforcement chief Brad Bennett said. "Firms engaging in this business must ensure that the information on the costs and benefits of these products provided to customers is accurate."
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
May 03, 2016 10:38 ET (14:38 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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