A Kansas financial services company is facing more fallout from past efforts to put distance between itself and its old corporate parent.[@@]

Missouri Securities Commissioner David Cosgrove issued a March 25 order suspending for 14 days starting Monday the authority of Waddell & Reed Financial Inc., Overland Park, Kan., to sell securities in Missouri. Cosgrove also scheduled an April 7 hearing to review arguments about whether the company should be barred from the state.

But a state court judge in St. Louis County responded Tuesday by issuing a temporary restraining order that bars enforcement of the suspension pending an April 4 hearing. The judge moved jurisdiction over the Waddell & Reed proceedings to the Missouri Administrative Hearing Commission, away from the state Securities Division.

Waddell & Reed said Tuesday in a statement that its 450 brokers in Missouri have resumed selling financial products in Missouri after a brief hiatus caused by Cosgrove’s suspension order.

Cosgrove has been investigating Waddell & Reed because of a group of thousands of variable annuity exchanges it completed in the early 2000s.

An insurance holding company, Torchmark Inc., Birmingham, Ala., acquired Waddell & Reed and Waddell & Reed’s United Investors Life Insurance Company subsidiary in the 1980s. Torchmark turned Waddell & Reed into a separate, public company in 1998, but it kept United Investors.

In 2001 and 2002, Waddell & Reed exchanged 6,700 variable annuities written by United Investors for annuities written by another company.

Officials at the National Association of Securities Dealers Inc., Washington, state securities regulators and others have argued that Waddell & Reed made the VA exchanges without determining whether the transactions were suitable for customers, but Waddell & Reed has argued that it believed the new annuities were better annuities.

Waddell & Reed says in a report filed with the U.S. Securities and Exchange Commission that it is trying to block Cosgrove’s suspension order because the NASD plans to review the case at a hearing in less than a month.

“We welcome the opportunity to present evidence demonstrating the benefits achieved by the clients as a result of the transactions identified by the division, an opportunity we have not been afforded to date by the division,” the company says in the SEC filing. “We are continuing to work with the staff of the division to reach a fair and reasonable resolution.”

An NASD staff official said he could not discuss the exact Waddell & Reed hearing date because the hearing is closed.

Representatives for Cosgrove were not immediately available for comment.