FINRA has charged broker/dealer MetLife Securities Inc. with paying a fine of $20 millionand $5 million directly to customers for misrepresenting variable annuity replacementapplications.
The threat of such a fine was discussed in MetLifeInc.'s quarterly report in November 2015.
The misrepresentations and omissions made between 2009 and 2014led customers to believe that the replacement annuities were more beneficial whenthey were usually more expensive than customers' existing variable annuities, FINRAsaid.
The variable annuity business brought in at least $152 millionin gross dealer commission for MetLife Securities over the six-year period, theregulator noted. Higher-ups at the company approved the replacements 99.79% of thetime, FINRA found, "even though nearly three-quarters of those applicationscontained materially inaccurate information." Quarterly account statementssent to customers typically stated that total fees and charges were zero when customerswere in fact paying substantial amounts.
MetLife Securities neither admitted nor denied the charges butconsented to the findings.
In February, MetLife announced it was selling the broker/dealer to MassachusettsMutual Life Insurance Co. The deal is pending completion.