Sell an annuity... go to jail
Interesting article in the WSJ...
Last month, Glenn Neasham, an independent insurance agent, was
ordered to spend 90 days in jail on a felony-theft conviction for
selling a complex annuity to an 83-year-old woman who prosecutors
alleged had shown signs of dementia.
The agent's conviction, by a state-court jury in Lake County, Calif.,
is sending shivers down the spines of Mr. Neasham's peers across the
country. They can't recall another case where an agent was sent behind
bars for selling an annuity.
The case underlines authorities' continuing discomfort with "indexed"
annuities, savings products that pay interest tied to the performance
of stock- and bond-market indexes. Insurers guarantee that buyers won't
lose any of their principal but in return charge sometimes-steep
penalties if investors withdraw their money early, for periods that can
stretch beyond a decade.
agents because of the high commissions they receive from insurers, which
can be 12% or more of the invested amount.
Lake County Senior Deputy District Attorney Rachel Abelson said in a
court filing there was "sufficient evidence presented [at trial] to show
that Fran Schuber was not capable of consenting to the transaction in
question and evidence showed that [Mr. Neasham] knew that at the time."
In an interview, Ms. Abelson said a $14,000, or 8%, commission "played
into his criminal intent."
just wow.... I'm 75% fee based but do a fair share of L share annuities but that does scare the crap out of me. I hope it gets overturned. Surley the insurance community is going to get this guy the A team as far as a legal team in concerned.
This could have far reaching impact.