Two clients have joined to sue their financial advisors over what the clients say were sales of unsuitable, illiquid cash-value life insurance arrangements.
Leona Binx Walton, a fashion model, says the advisors sold her six life insurance policies with a total annual carrying cost of $87,506.36, after she had emphasized that she was uncertain about her income and needed liquidity, according to the complaint.
The other client, Andrew Mukamal, is a freelance fashion stylist who had a limited income and an inheritance from his father. He says the defendants sold him four cash-value policies that required him to pay about $188,067.27 in annual premiums, although he emphasized a need for near-term liquidity.
The complaint was filed in New York state court in New York County.
The plaintiffs have sued the two advisors, John Kenyon Lang and Michael Blackwell.
Lang and Blackwell work for Cambium, which is a registered representative of Park Avenue Securities. Park Avenue Securities is a subsidiary of Guardian.
In addition to Lang and Blackwell, the list of defendants includes Cambium, Park Avenue Securities and Strategies for Wealth. Strategies for Wealth is a Guardian general agency.
The plaintiffs have also sued Guardian Life and John Hancock Life, the life insurers that issued the policies involved in the sales, in an effort to have the insurers rescind the policies and return any premiums paid, with interest.
Cambium and Strategies for Wealth did not respond to requests for comment.
Guardian said through a representative that it was aware of the lawsuit but had not yet been served.
John Hancock also was not available to comment.
