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Home > Blog > LPL Faces Class Action Lawsuit Over Broker’s Annuities Sales

LPL Faces Class Action Lawsuit Over Broker’s Annuities Sales

Two Nebraska investors have filed a class-action lawsuit against LPL Financial, alleging that one of the company’s brokers – Bob Bennie – misrepresented the costs and benefits of variable annuities.

As reported in a June 17 article by the Associated Press, more than $365,000 of the products had been sold to investors Richard and Carol Ripley. The Ripley’s lawsuit, which was originally filed last month in a Nebraska state court and which seeks class-action status, has been transferred to a Nebraska federal court.

In their lawsuit, the Ripleys contend that Bennie failed to disclose the unsuitable nature of the annuities and misled them about withdrawing money without facing a penalty and the costs of the annuities.

Boston-based LPL provides trading and support services to 16,000 independent brokers. Bennie is the owner of Bob Bennie Wealth Management.

Variable annuities have faced growing scrutiny lately, with regulators initiating enforcement actions against annuity sellers for unsuitable sales and lack of disclosure.

In the simplest terms, a variable annuity is a tax-deferred investment that comes with an insurance contract in which earnings grow tax-deferred.

At the same time, variable annuities come with a high commission fee – up to 9% in some instances. Moreover, many investors are often unaware of the early withdrawal penalties associated with variable annuities.

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