A variable annuity is a contract between an investor and an insurance company (typically through a brokerage firm) where the insurance company agrees to make periodic payments to the investor, beginning either immediately or at some future date. Depending upon the circumstances, investors can do a tax-free exchange, or switch, of an existing annuity contract for a new annuity contract. The investor may be assessed a surrender charge for the annuity switch and additional fees, as well as a new surrender charge period for the new annuity.
Here, FINRA alleges MetLife violated multiple FINRA rules and regulations, including those regarding misrepresentations, suitability, and supervision. For example, under NASD Conduct Rule 2310 (now FINRA Rule 2111), financial advisors are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule).
In the context of variable annuity investments, FINRA-members, such as MetLife, are held to the suitability standard for both the initial sale and future replacement of the annuity. Typically, a claim for unsuitable investments is brought as a form of a negligence claim with the theory: the financial advisor had a duty to recommend suitable investments; the financial advisor breached the duty with unsuitable investments; and the financial advisors unsuitable investments caused the investor damages.
Lufrano Law, LLC, a national securities litigation firm, is currently investigating securities arbitration claims against MetLife for alleged misrepresentations, suitability, and supervision in connection with sales and replacements of variable annuities and certain riders on such annuities.
If you or someone you know suffered investment losses and damages investing in variable annuities through MetLife, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please complete the contact form or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.