NU Online News Service, Feb. 4, 2005, 4:15 p.m. EST
A group of lawyers is accusing a securities broker of letting hidden compensation arrangements affect its investment recommendations.[@@]
The lawyers have filed a suit in the U.S. District Court in San Diego that says A.G. Edwards & Sons Inc., St. Louis, failed to disclose material facts about financial interests with third-party suppliers of variable annuity contracts.
“The third parties paid monies and other incentives to have variable annuities steered to them by A.G. Edwards without properly disclosing the preexisting arrangement to its customers,” according to the complaint for the case, Kathleen Mitton vs. A.G. Edwards.
“Secret” arrangements with insurers for sharing contingent fees increased customers’ costs, according to the complaint.
Ron Marron, a San Diego lawyer, is leading the team that filed the complaint.
The lawyers who filed the complaint are seeking court permission to represent a class that would include all consumers who bought variable annuities through A.G. Edwards between Jan. 1, 1990, and Feb. 3, 2005.
A spokeswoman for A.G. Edwards says the company is not able to comment on the case because executives at the company have not yet seen a copy of the complaint.