The Man Who Blew the Whistle

Former MassMutual agent says he tried to resolve an annuity problem internally before reporting it

There are implications to breaking the silence that Dodd-Frank can't control. There are implications to breaking the silence that Dodd-Frank can't control.
In a rare occurrence, a former MassMutual employee is speaking out about the recent whistleblower complaint he made to the Securities and Exchange Commission after exposing serious flaws in two of MassMutual’s variable annuities, the Guaranteed Income Benefit Plus 5 and 6.

The whistleblower, insurance agent Bill Lloyd, was awarded $400,000.

Like other MassMutual salespeople, Lloyd told prospects that the VAs guaranteed that investors’ annuity income stream would grow to a predetermined cap regardless of how the investment itself performed, and that they wouldn’t run out of money — but to the horror of Lloyd, who was described to New York Times columnist Joe Nocera as a straight shooter who would never knowingly rip off his clients, that wasn’t the case.

After his attempts to get the issue resolved internally failed and when the Financial Industry Regulatory Authority didn’t step in, Lloyd turned to the SEC for help. The Dodd-Frank Act offers some protections to whistleblowers, Nocera writes, but there are ramifications of informing on an employer that the law can't control.
—Katie Rass, ThinkAdvisor
Late last month, the Securities and Exchange Commission issued an oblique press release announcing that it was awarding an unnamed whistle-blower $400,000 for helping expose a financial fraud at an unnamed company.
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