Variable annuities have again come under fire, this time through a pair of class-action lawsuits led by Finkelstein & Krinsk, one targeting Linsco/Private Ledger Corp. and the other targeting Morgan Stanley. In statements, Finkelstein & Krinsk claims that both firms "made false and misleading statements and omitted material facts concerning their undisclosed financial interests with third-party suppliers of annuity contracts," the firm stated.
Specifically, from January 1, 1990 through this month, LPL and Morgan Stanley did not disclose contingent fee-sharing agreements with some carriers, resulting in higher premiums paid to the carriers and "inflated premiums" for customers in these variable annuities, the suit charges. It does not name any specific carriers implicated in the case.
The Law Office of Ronald A. Marron, Casey, Gerry, Reed & Schenk, and Barrack, Rodos & Bacine, are also joining in the suit, which seeks to recover damages on behalf of clients who purchased affected variable annuity contracts during this period.