SEC Probes AIG Unit on Retirement Products for Teachers
November 6, 2019 by Gretchen Morgenson and Anne Tergesen
The Securities and Exchange Commission is investigating sales and disclosure practices at Valic, a unit of giant insurer American International Group Inc., including the company’s dealings with retirement-plan participants at school districts and universities, according to people briefed on the matter.
The inquiry centers on whether incentives in Valic’s compensation structure rewarded representatives for selling higher-cost products to retirement plan participants and whether Valic materials and representatives properly disclose the payments its representative receive on certain product sales, the people familiar with the matter said. The SEC is also looking at Valic’s arrangements with school districts, in which it provides money to cover certain school expenses while also offering investment advice and products to school employees, the people said.
In recent weeks, several high-level Valic executives have been placed on administrative leave, the people added.
A spokesman for Valic said: “We cannot comment at this time on any regulatory inquiries or related personnel matters. It is our policy to cooperate fully with all regulatory inquiries and to take steps to ensure compliance with the law and best practices.”
AIG shares fell as much as 1.5% after The Wall Street Journal reported the SEC probe Tuesday. Shares recovered somewhat to finish the day at $52.10, down 0.9%.