Waddell & Reed Brokers Continue To Sell In Missouri

In 2001 and 2002, Waddell & Reed exchanged 6,700 variable annuities written by United Investors for annuities written by another company.

Officials at the National Association of Securities Dealers Inc., Washington, state securities regulators and others have argued that Waddell & Reed made the VA exchanges without determining whether the transactions were suitable for customers, but Waddell & Reed has argued that it believed the new annuities were better annuities.

Waddell & Reed says in a report filed with the U.S. Securities and Exchange Commission that it is trying to block Cosgrove's suspension order because the NASD plans to review the case at a hearing in less than a month.

"We welcome the opportunity to present evidence demonstrating the benefits achieved by the clients as a result of the transactions identified by the division, an opportunity we have not been afforded to date by the division," the company says in the SEC filing. "We are continuing to work with the staff of the division to reach a fair and reasonable resolution."

An NASD staff official said he could not discuss the exact Waddell & Reed hearing date because the hearing is closed.

Representatives for Cosgrove were not immediately available for comment.