Annuity Products Used to Scam Senior Citizens


The securities regulator for Illinois has revoked the licenses of two investment adviser representatives, who are supposed to be fiduciaries, for recommending that elderly clients partially liquidate variable annuities in order to purchase equity index annuities, so that the reps could receive hundreds of thousands of dollars in commissions, according to Darla Mercado’s InvestmentNews article entitled “Illinois securities cops revoke licenses of reps for annuity sales.”

Thomas N. Cooper and Susan B. Cooper were reportedly fined $10,000 and barred from the securities industry in Illinois, as was Senior Financial Strategies Inc. doing business as Pinnacle Investment Advisors.

Between Feb. 26, 2008, and June 9, 2008, the Coopers sold 65 Aviva fixed indexed annuities to 12 different clients, garnering some $426,281 in commissions, according to the article.

The investors, who averaged 73 years of age, incurred $122,630 in surrender charges as a result of the liquidation of their variable annuities.

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