Equi-Vest, Accumulator Variable Annuity Investors Could Recover Losses

Securities arbitration attorneys are currently investigating claims on behalf of investors who suffered significant losses in AXA Equitable Life Insurance Company Equi-Vest or Accumulator variable annuity contracts — specifically those invested in the managed funds, AXA Tactical Manager Strategy or ATM-managed funds.

Reportedly, the New York State Department of Financial Services (“DFS”) launched an investigation in 2011 concerning alleged omissions on the part of AXA Equitable regarding its applications for approval to alter the Equi-Vest and Accumulator variable annuities. The change would substitute ATM-managed funds for previous managers. According to DFS’ allegations, AXA Equitable misled DFS regarding the change’s impact and failed to disclose the underperformance of the ATM funds under the previous managers. Allegedly, these actions resulted in a reduced return for investors, especially for those who paid fees to receive guaranteed minimum benefits and those who wanted to be more aggressive in their investment strategy. In order to settle the investigation, AXA Equitable agreed to pay $20 million on March 17, 2014.

Some AXA Equitable investors may have been misled about the variable annuity contract changes. In addition, certain characteristics of variable annuities, including high penalties for early withdrawal, long surrender periods and low rate of return, make these products unsuitable for many investors. Many brokers are motivated to make unsuitable recommendations because of the large commissions associated with variable annuities.

Variable annuities are a type of insurance product. With this product, the investor pays into an account now in exchange for the guarantee of a future payout. The investment is tied to a stock index return, making it variable. According to attorneys, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

If you believe you were misled regarding Equi-Vest or Accumulator variable annuity contracts, or that you received an unsuitable recommendation to invest in variable annuities, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.