Law Firm Organizes Suit Against Annuity Issuer

By Warren S. Hersch

January 11, 2010 at 07:00 PM

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The plaintiffs in a suit filed in a federal court in Phoenix are accusing an insurer of misrepresenting the tax benefits of buying deferred variable annuity contracts.

Hagens Berman Sobel Shapiro L.L.P., Phoenix, has filed the suit in the U.S. District Court for the District of Arizona on behalf of purchasers of deferred annuity contracts from The Variable Annuity Life Insurance Company, Amarillo, Texas, a unit of American International Group Inc., New York. (NYSE:AIG)

Lawyers for the plaintiffs are seeking to represent a class that includes consumers who bought the contracts during the period between Jan. 1, 1974, and the present.

The plaintiffs allege that, during the period in question, defendants marketed and sold annuity contracts by making material misrepresentations and failing to disclose material facts to plaintiffs and class members. The complaint charges VALIC, its successors and subsidiaries, as well as VALIC officers and directors, with violations of the Securities Exchange Act of 1934.

The plaintiffs allege that VALIC agents failed to disclose that the tax deferral feature of the deferred annuity was redundant and unnecessary for class members

Representatives for VALIC could not immediately be reached for comment.

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