A.G. Edwards Fined By NASD in Annuity Case
Los Angeles Times
A.G. Edwards Inc. was ordered by an NASD arbitration panel to pay a widow $339,974 for failing to properly supervise a broker who made risky investments with her savings in 1999.
The regulatory body, which oversees broker conduct, said arbitrators awarded $142,839 in compensatory damages, $100,000 in punitive damages and $97,135 in legal fees to Delores White of Indio on April 13.
A.G. Edwards approved the broker’s decision to buy a variable annuity for White, now 75, even though she wanted to invest conservatively, her lawyer, Philip M. Aidikoff, said.
Variable annuities typically offer guaranteed lifetime income and a death benefit, with the rate of return tied to mutual fund investments. The broker chose risky funds, Aidikoff said, and White lost money as a result.
An A.G. Edwards spokeswoman said that the firm hadn’t been notified of the decision.