Annuity salesman jailed for inappropriate sale

[soupcxan]

Maybe this will put some sense into VA sellers. An 8% ($14k) commission on a $175k annuity? That's an even bigger scam than real estate agents!

WSJ: Annuity Case Chills Insurance Agents

Annuity Case Chills Insurance Agents - WSJ.com

 

[brewer12345]

Wow, felony theft. Usually the agents just get the crap sued out of them.

 

[LOL!]

And in the '60s when a typical mutual fund front-end load was 8.5% what was that?

 

[brett]

It warmed my heart to hear about his conviction. Hopefully the transaction was reversed.

I often wonder how people of this calibre can live with themselves. Same issue with investment salesmen who sell high risk funds to seniors...on the basis of 'trust'. They should bring back horsewhipping as a penalty for these vultures.

 

[powerplay]

Wow! That's pretty amazing. I couldn't read more than the preview, but it did say Calif. so I wonder if this will be a 'changing' moment for those that sell these complex products to the elderly.

 

[frayne]

The SOB should be burned at the stake.

 

[Texas Proud]

It warmed my heart to hear about his conviction. Hopefully the transaction was reversed.

I often wonder how people of this calibre can live with themselves. Same issue with investment salesmen who sell high risk funds to seniors...on the basis of 'trust'. They should bring back horsewhipping as a penalty for these vultures.

They did say the company paid back the lady's son the full amount with interest...


I do agree with the decision to bring a fraud case... this was an inappropriate product for the lady even if she were competent.... she wanted something in place of a CD.... how is a complex annuity even close to that...

It also makes you wonder how many others he fleeced when it said he was making $500,000 per year before this....

 

[traineeinvestor]

Sounded like a good outcome to me. However, I have to wonder:

1. how many other cases are out there were the salesperson gets away with it?

2. as we get older, will we be increasingly either denied access to a range of financial products or be required to proove mental competence before we can get them?

 

[sheehs1]

There are several statements in this article that give me heart burn and to top it off he is playing like he is a victim in some respects.
A couple of years ago, an agent approached me repeatedly about buying a variable annuity. When all else failed, he finally offered to "split his commission" with me. I did not ask him how much as I wanted no part of it. Just the fact that he made this offer was somewhat shocking and told me his commission must be pretty darn good.

 

[traineeinvestor]

A couple of years ago, an agent approached me repeatedly about buying a variable annuity. When all else failed, he finally offered to "split his commission" with me. I did not ask him how much as I wanted no part of it. Just the fact that he made this offer was somewhat shocking and told me his commission must be pretty darn good.

Does not suprise me at all.

The one I really hate is the bank staff who try to sell me annuities which offer a non-guaranteed expected yield which is less (usually much less) than the yield available on the same bank's long term bonds (with the added disadvantages of not being able to get your money back for several years and complete loss of principal on death and no advantages at all).

 

[ziggy29]

And in the '60s when a typical mutual fund front-end load was 8.5% what was that?

The '60s. A much different era with respect to expectations on financial products and how they are packaged and sold.

The main point isn't even the outrageous commission here. The point is targeting people who aren't in a position to really understand what they are buying, not in a frame of mind to give informed consent, and sold by people who don't care whether or not the product is wildly inappropriate for the buyer.

If someone who understood the product and was mentally capable of giving informed consent agreed to buy a crap financial product with an 8.5% commission, I'd call that a stupid decision but not one that's a victim of criminal fraud. The salesman isn't busted for selling a high commission product but for preying on those who are not capable of understanding what they are buying.

 

[Texas Proud]

The '60s. A much different era with respect to expectations on financial products and how they are packaged and sold.

The main point isn't even the outrageous commission here. The point is targeting people who aren't in a position to really understand what they are buying, not in a frame of mind to give informed consent, and sold by people who don't care whether or not the product is wildly inappropriate for the buyer.

If someone who understood the product and was mentally capable of giving informed consent agreed to buy a crap financial product with an 8.5% commission, I'd call that a stupid decision but not one that's a victim of criminal fraud. The salesman isn't busted for selling a high commission product but for preying on those who are not capable of understanding what they are buying.

+1 on this.... it is not the high commissions that creates the fraud, but selling a product that should not be sold... heck, I think the guy should have been convicted even if the commission was 2%.... it was NOT a product that the lady should have bought at her age...

 

[FinanceDude]

Hmm.....Allianz and their equity indexed annuities strike again...... He is an idiot, and deserves what happened to him........

 

[brett]

Many jurisdictions are now passing legislation specifically aimed at elder abuse-including cases like this of financial abuse. I live in Canada. White collar crime-especially against seniors- is rampant and the the penalties are essentially nil. The RCMP have already publicly admitted that they do not have the resources to properly pursue these crimes-so they don't.

Very recently, in the UK, a very large annuity transaction by a commissioned bank agent was overturned when it was learned that this salesperson was aware that the he was selling the product to a terminally ill elderly gentleman of unsound mind who had less than six months to live. The commission was substantial. The poor man died within six months. Instead of quietly reversing the transaction the bank decided to fight and hold on the money that had been fraudulently obtained. They lost the case.

Fortunately his family not only sued, but ensured that the story made it's way to all of the national newspapers.

 

[RetireBy90]

Perhaps we need to bear in mind that her boyfriend brought her to the salesman with the express purpose to purchase this product. From what I read, he wasn't out trolling for the business, she came to him.

On the one hand we don't know all the details, the jury heard both sides and found him guilty, so I have to trust that there was some evidence he knew of her condition.

On the other, how about we jail car salesmen that sell fast cars or Hummers? How about if they sell a sporty car to a person with speeding tickets?

 

[REWahoo]

...how about we jail car salesmen that sell fast cars or Hummers? How about if they sell a sporty car to a person with speeding tickets?

I like your thinking!

 

[Texas Proud]

Perhaps we need to bear in mind that her boyfriend brought her to the salesman with the express purpose to purchase this product. From what I read, he wasn't out trolling for the business, she came to him.

On the one hand we don't know all the details, the jury heard both sides and found him guilty, so I have to trust that there was some evidence he knew of her condition.

On the other, how about we jail car salesmen that sell fast cars or Hummers? How about if they sell a sporty car to a person with speeding tickets?

I don't have a problem with all the different types of salesmen... but some people do have more of an obligation to their customers than others... I am not saying a fiduciary obilcation, but one of trust.... I would put doctors, lawyers, accountants and financial advisors in this position.. I am sure there are others that someone else will mention...

But, car salesmen, real estate agents, your local check out gal at the grocery store does not.... (I can just see the girl who checks you out and says 'You do not need any more CANDY with your BMI'....)....

 

[Finance Dave]

On the one hand we don't know all the details, the jury heard both sides and found him guilty, so I have to trust that there was some evidence he knew of her condition.

+1

Could be that the key factor was her emotional/medical dimentia situation.

 

[Animorph]

I guess they need to come up with an 8% commission product that is more appropriate.

 

[FinanceDude]

I guess they need to come up with an 8% commission product that is more appropriate.

The insurer sets the commissions, not the agent..........

Plus, banks in general are notorius for selling LONG surrender charge products. ALL major carriers have short surrender and no-surrender products, and yet most banks don't let their reps sell them. Why? Because banks are greedy............

 

[Nords]

2. as we get older, will we be increasingly either denied access to a range of financial products or be required to proove mental competence before we can get them?

On the one hand we don't know all the details, the jury heard both sides and found him guilty, so I have to trust that there was some evidence he knew of her condition.

In his defense, my father in mid-stage Alzheimer's can carry on a social conversation in a coffee-house environment for up to 30 minutes with someone before they realize that something's not quite right.

But the sales guy had to have figured that out by the time he finished "explaining" the product to her. It sounds as if there was convincing evidence at the trial that he was expected to realize she was demented. I bet his e-mail was subpoena'd.

 

[harley]

Perhaps we need to bear in mind that her boyfriend brought her to the salesman with the express purpose to purchase this product.

Which leads to the question, what are the death benefits and who is the beneficiary?

 

[haha]

This case is insane. Just an insurance comisioner and a prosecutor trying to make a name for themselves. What was wrong with that jury? Oh, I know, the agent was a 1%er.

Ha

 

[clifp]

This case is insane. Just an insurance comisioner and a prosecutor trying to make a name for themselves. What was wrong with that jury? Oh, I know, the agent was a 1%er.

Ha

If the fact are as presented by the article, I some what agree. If she was brought to the office by her boyfriend who was a satisfied customer I don't think the case is particularly cut and dried. I am surprised with so many worse abuses of the elder insurance sales and other financial advisers I am surprised that is the rare case where somebody went to jail.

Still I found a salesman task harder than selling ice to Eskimos.

As his April 18 reporting date to Lake County Hill Road Jail approaches, Mr. Neasham said he has had "really bad dreams" about going behind bars. Once earning $500,000 annually, he now seeks donations for legal fees.

I think the board should raise money to help pay for Mr. Neasham legal fees. Poor guy he was making 500K a year and now can't pay his lawyers. Who is with me