The Securities and Exchange Commission (SEC) charged Equitable Financial Life Insurance Company for providing “materially misleading statement and omissions concerning investor fees” to around 1.4 million annuity customers.
The insurer agreed to pay $50m (£42m, €49m) to the investors in question.
The SEC said that, since 2016, Equitable gave clients the “false impression” that their quarterly statements listed all fees during the period.
But the regulator’s investigation revealed that the documents only included certain types of fees that investors “frequently incurred and that more often than not the statements had $0.00 listed for fees”.
As a result, the watchdog’s order found that Equitable violated the antifraud provisions of the Securities Act 1933.
The life insurer did not admit nor deny the SEC’s findings but agreed to cease and desist from committing any future violations of the provisions, and to pay a $50m civil penalty which will be distributed to affected investors.
“When considering how to invest their hard-earned money and save for retirement, it is essential that investors not be misled about the fees they are paying,” said Gurbir Grewal, director of the SEC’s division of enforcement.
“This case should serve as an important reminder to investment firms to carefully review their statements to ensure fee information is disclosed properly.”
