According to the SEC’s order, since at least 2016, Equitable gave investors—who were mostly public school teachers—“the false impression that their quarterly account statements listed all fees paid during the period.” In reality, the statements listed only certain types of fees that investors infrequently incurred and that more often than not the statements had zero dollars listed for fees, the SEC’s investigation found.
“This case should serve as an important reminder to investment firms to carefully review their statements to ensure fee information is disclosed properly,” SEC Enforcement Division Director Gurbir Grewal remarked in a statement.
The SEC’s order found that Equitable violated the antifraud provisions of the Securities Act of 1933. In addition to the $50 million civil penalty, Equitable agreed to cease and desist from committing or causing any future violations of the provisions.
“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 Grewal.
Without admitting or denying the SEC’s findings, Equitable also agreed to revise how it presents fee information in its variable annuity account statements. 