The great surrealist painter Salvador Dali is known to have signed forged paintings. “The only fake Dali,” the painter allegedly said, “is one for which I do not get paid.”
Keep that situation in mind as you continue to read.
The Securities and Exchange Commission announced last week a $40 million civil settlement with a financial adviser partnered with the Florida Education Association that it says violated the rules in promoting retirement investments to Florida teachers. The FEA, a statewide federation of teacher and education workers’ labor unions, boats 137,000 members, making it the largest union in the state
The SEC’s investigation found Valic paid the salaries of three employees at the entity linked to the Florida union. At meetings and seminars where teachers sought investment advice, the three touted Valic products, presenting themselves as workers for the union entity and not disclosing they were also paid by Valic, the SEC said.
The Journal reported in December that the union entity was known as Creative Benefits for Educators. As recently as October 2019, teachers’ unions in central Florida were advising members to take retirement questions to Mary L. Thomas, a consultant at the union-owned firm—and a longtime Valic sales representative, according to regulatory records.
After the Journal asked about her dual role, the Creative Benefits website went dark last fall. At the time, a spokesman for Creative Benefits said that it no longer employed Ms. Thomas and two other consultants.
Teachers who bought Valic’s Portfolio Director, an annuity popular in teachers’ retirement plans, paid fees of up to 2.3% of assets annually. Valic earned $29 million from its annuity products sold during the 13 years it dealt with Creative Benefits. As part of the settlement with the SEC, Valic agreed to charge lower fees to teachers who signed up to have their money managed by the company, under a “wrap-fee” program.
Is it okay to defraud teachers as long as the union gets paid? Rather than melting away, this memory should persist with Florida educators.