Lawyers are trying to organize a class-action suit in connection with allegations that a company used what seemed to be an independent financial advice operation to push its own products.
Lawyers at Federman & Sherwood, Oklahoma City, Okla., and Behlen, Bentwood & Luther, Oklahoma City, are seeking class-action status for a complaint filed in the U.S. District Court for the Western District of Oklahoma on behalf of Robert Thomas and other consumers who bought proprietary products from the defendants between January 1998 and June 2004.
The defendants are Metropolitan Life Insurance Company, MetLife Securities Inc. and MetLife Investment Advisors Company L.L.C., affiliates of MetLife Inc., New York.
“We’re just going through [the complaint] now,” MetLife spokesman Holly Sheffer says.
The plaintiff accuses the defendants of violating Oklahoma laws, federal securities laws and regulations, and conduct rules established by the National Association of Securities Dealers, Washington, by using hidden and poorly disclosed incentives to sell proprietary mutual funds and life insurance policies to consumers who believed they were purchasing financial planning services.
The defendants had a fiduciary obligation to place the interests of the client above their own and disclose possible conflicts of interest, the plaintiff alleges in the complaint.
The main mutual fund shares the financial planners sold came with a 5.75% front-end load, which was used to pay for health insurance and vacation pay for the agents, the plaintiff alleges.
The agents received a 2% front-end fee for selling the proprietary funds and a 0.75% front-end fee for selling other funds, the plaintiff alleges.