Waddell & Reed Agrees To $32.5 Million In Settlements

Waddell & Reed emphasizes that it is neither admitting nor denying the officials’ allegations about the VA exchanges, but the company now says it has agreed to resolve some litigation and regulatory actions related to the exchanges by paying a $5 million fine to the National Association of Securities Dealers, Washington, establishing an $11 million restitution fund for some variable annuity clients; and paying $2 million to a consortium of states that investigated it.

Waddell & Reed also has reached a preliminary agreement to pay $14.5 million to Torchmark to settle all outstanding litigation between the companies, including actions in Alabama, California and Kansas. One Torchmark case involving Kansas income tax refunds is not covered by the agreement, Waddell & Reed says.

The preliminary agreement between Waddell & Reed and Torchmark calls for both companies to “execute a full general mutual release to resolve any and all claims or causes of action arising or occurring at any time in the past,” Waddell & Reed says.

Once the proceedings are settled, the Alabama courts will release a $56 million cash bond to Waddell & Reed, Waddell & Reed says.

Agreeing to the settlement “is a positive step for Waddell & Reed, our financial advisors, our employees and our clients,” Waddell & Reed Chairman Keith Tucker says in a statement about the agreement. “These matters date back several years and their removal as an issue is an important action. We worked long and hard to move toward what we felt was an appropriate solution in each case. We’re satisfied with the resolution of these matters and are eager to focus on our clients and the strength of our business.”