The regulatory body found that some of American Express's registered representatives sold variable annuities with inadequate disclosure about costs and benefits. Furthermore, it also found fault with the company's establishment, maintenance, and enforcement of supervisory policies regarding the sale of variable annuities and variable life insurance.
The action is part of a concerted effort on the part of the NASD to crack down on faulty sales practices of variable products. In June, NASD officials announced at
"We will continue to focus on variable annuity sales practices through guidance to investors, notices to broker dealers and enforcement actions to ensure that variable products are sold in an appropriate manner. We continue to see instances of abusive sales practices and suitability problems with variable annuities," said Mary L. Schapiro, vice chairman and president of regulatory policy and oversight at the NASD.