Class action lawsuit says LPL broker misled investors about annuity benefits, costs

Investors say LPL broker misled about annuities

OMAHA, Neb. — A pair of Nebraska investors has filed a class-action lawsuit against LPL Financial, saying that one of the company’s brokers misled them about the costs and benefits of annuities.

The investors’ attorneys said in court documents that broker Bob Bennie made multiple misrepresentations about the $366,500 in annuities he sold to Richard and Carol Ripley. Many others have bought variable annuities from Bennie, but the lawyers don’t yet know how many.

Seattle lawyer Dave Gaba, who is working with the Mattson Ricketts firm in Lincoln, said there was no reason for the Ripleys to buy annuities because their money was already in a tax-sheltered individual retirement account and they needed the money for their retirement income.

The variable annuities at issue in this lawsuit packaged a life insurance policy with investments in mutual funds or other securities to defer taxes on investment gains and provide a death benefit. Gaba said that makes these variable annuities useful to only a small group of people with a high net worth.

“It just makes no sense,” Gaba said.

Bennie, who used to lead the Lancaster County Republican Party, has helped organize tea party events in the state this year and is the chairman of the Lincoln tea party group. Officials at Bennie’s wealth management business in Lincoln declined to comment on the lawsuit because Bennie is not a named defendant.

Michael Rhodes, with the law firm defending LPL, said LPL believes the lawsuit has no merit and plans to vigorously defend itself. LPL officials declined to discuss details of the case.

LPL is based in Boston, and it describes itself as one of the nation’s largest financial services companies, serving more than 12,000 financial advisers nationwide.

The Ripleys said in their lawsuit that Bennie failed to disclose the unsuitable nature of the annuities and misled them about their ability to withdraw money without penalty and the costs of the annuities.

The lawsuit says LPL failed in its fiduciary duty to investors because Bennie put his financial interests ahead of his clients’ interests.

“Customers are often unaware that variable annuities earn commissions as high as 5, 7 and even 9 percent for the investment adviser or broker,” Gaba said.

The lawsuit was originally filed last month in state court, but it was moved to federal court this week.

Online:

LPL Financial: lplfinancial.lpl.com

Bob Bennie Wealth Management: www.bobbennie.com