PROVIDENCE – A Citizens Financial Group Inc. subsidiary is under investigation by Massachusetts securities regulators regarding its sale of annuities controlled by now-indicted financier Greg Lindberg, The Wall Street Journal reported on March 30.
Mass. Secretary of State William Galvin is leading the investigation into Citizens Securities Inc. for annuities it sold from Colorado Bankers Life Insurance, which was one of Lindberg’s largest insurers.
The investigation follows an article published by the Journal that reported tens of thousands of people had $2.2 billion of their funds frozen since 2019 when Lindberg’s insurance empire collapsed.
In February, Lindberg was indicted on federal fraud and conspiracy charges, which alleged that he loaned $2 billion of his insurers’ funds to companies in his private conglomerate, and used large amounts to finance a lavish lifestyle, according to the Journal. Lindberg has pleaded not guilty.
The Massachusetts investigation was launched after a retired couple claimed a Citizens financial adviser told them to invest their life savings of $400,000 into a Colorado Bankers Life Insurance-backed annuity, which is now frozen, preventing them from accessing the funds.
In a filing with the U.S. Securities and Exchange Commission on March 30, Citizens said it conducted appropriate diligence on the insurer and considered the firm’s investment rating, which was strong at the time, and third-party research in placing its products on its platform.
Citizens said it only sold CBL annuities between November 2017 and October 2018, halting the sales when it learned Lindberg was under investigation.
“It is very unfortunate that our customers and others have suffered as a result of this situation and we are committed to doing what we can to help alleviate the impacts, including offering liquidity programs for customers who are experiencing hardship,” a Citizens spokesperson told the Journal.
