The Securities and Exchange Commission (SEC) announced that VALIC Financial Advisors (VFA) agreed to pay approximately $40 million to settle two regulatory actions against the firm over its disclosure failures.
VFA is a financial services vendor in almost every school district in Florida. It is based in Houston, Texas.
VFA failed to disclose payment to an entity owned by Florida teachers’ union
In the first regulatory action, the SEC alleged that VFA failed to disclose a financial arrangement between its parent, The Variable Annuity Life Insurance Company (VALIC) and for-profit company owned by Florida K-12 teachers’ unions (the Teachers Union Entity).
Under the financial arrangement, VALIC made cash payments and provided other financial payments to the Teachers Union Entity in exchange for its exclusive endorsement of VFA as its preferred financial services partner for all Florida K-12 teachers and other public education employees.
The financial arrangement allowed VFA and VALIC more than $30 million in fees from the investment products it sold to Florida K-12 teachers from 2006 to 2019, according to the SEC.
