Finra Panel Awards $1M Over Variable Annuity "Fraud"
A Finra arbitration panel has awarded more than $1 million in damages to an investor who was sold a variable annuity by a Wilbanks Securities broker.
The client, Grace Huitt, alleged common law fraud, breaches in contract law and fiduciary duty, negligence in supervision and violation of the Colorado Securities Act, related to her investment in an ING Landmark Variable Annuity, according to the award document.
She was originally seeking well over $2.5 million in compensatory and punitive damages and attorneys’ fees but was awarded $537,000 in compensatory damages and $537,000 in punitive damages plus interest, according to Finra’s award document.
The panel dismissed Wilbanks’ counterclaim seeking dismissal and repayment of attorneys’ fees related to the claim, according to the document.
Huitt was allegedly promised a 7% compounded annual return on the annuity when she bought it in 2008 at a Colorado branch of Wilbanks Securities, her lawyer, Marc Fitapelli, a partner at the law firm Fitapelli Kurta, tells InvestmentNews.
The compensatory damages awarded by the Finra panel reflect the difference between what Huitt had been promised and what she received when she sold the annuity in 2012, the lawyer says.
Aaron Wilbanks, the firm’s president and CEO, didn’t reply to InvestmentNews’ request for comment. Fitapelli, meanwhile, tells the publication that variable annuities “are the worst thing in the world” because, he claims, they’re confusing and cost too much, and shouldn’t be sold to investors.