Merrill Lynch Faces Lawsuit Over Alleged Misrepresentation of Variable Annuity to Retired Customer

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Updated on: March 8, 2024

KlaymanToskes Offers Recovery Options for Merrill Lynch Customers

National investment loss lawyers KlaymanToskes reports a former Merrill Lynch customer is taking legal action against the firm, alleging that her former brokers misled her regarding the features of a variable annuity. According to the complaint, the customer asserts that she invested $231,000 in annuity premiums based on assurances from her broker that any payments made would serve as a guaranteed death benefit, unaffected by any withdrawals.

The customer further claims that her broker failed to disclose the significant internal costs associated with the annuity. Even when another broker took over her account, similar assurances were made to the customer regarding the death benefit. The 70 year old customer filed the lawsuit in the U.S. District Court in Flint, Michigan, citing professional malpractice and negligent misrepresentation.

Investors that suffered losses at Merrill Lynch are encouraged to contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lawrence@klaymantoskes.com for a free consultation to discuss legal options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you. 

KlaymanToskes Offers Recovery Options for Merrill Lynch Customers:

This case brings to light broader issues surrounding annuity sales, particularly in the context of retirement planning. While annuity sales have surged in recent years, especially within independent broker-dealers, regulatory changes such as the proposed fiduciary rule from the Department of Labor could impact their usage in retirement accounts moving forward. The proposed rule would “close loopholes” and impose a new requirement that a wider spectrum of financial advisors must put their clients interests ahead of commissions or face penalties and restitution requirements. 

Interestingly, neither of the Merrill Lynch brokers involved in the alleged misrepresentation are named as parties to the complaint. One broker, who inherited the customer’s account, has a previous complaint related to misrepresentation of a variable annuity issued in 2007. The firm settled this complaint in 2022, with the broker contributing to the settlement. The other broker, who originally sold the annuity, has not been registered since 2013.

Financial advisors and their firms are responsible for providing suitable investment advice and must act in the best interest of their customers. Investment firms may be held liable for any losses incurred by their customers in the event of unsuitable investment recommendations, misrepresentations or omissions of material facts, and/or an overconcentration of the customer’s portfolio in one particular investment, class, or market sector. Further, financial professionals and their firms cannot disregard a customer’s risk-tolerance when making investment recommendations.

Our law firm can help determine if your investment loss is due to fraud, financial advisor misconduct, or unsuitable investment advice. Depending on your circumstances, you may be entitled to recover your losses through FINRA arbitration.

Current and former customers of Merrill Lynch who suffered investment losses are encouraged to contact attorney Lawrence L. Klayman at 888-997-9956 or by email at lawrence@klaymantoskes.com in furtherance of our investigation. 

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.


KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.