JACKSON — Secretary of State Delbert Hosemann and the agency’s Securities and Charities Division have reached a settlement with American General Securities Incorporated (AGSI) and one of its former brokers, Leroy Jack Smith, on behalf of Mississippi investors.
“Individuals and companies should be held accountable for failing to give honest advice to Mississippi investors,” said Hosemann. “We are pleased to negotiate this settlement on behalf of those individuals who were misled by Smith and are now able to recover some of their investments.”
In a consent order issued by the Office of the Mississippi Secretary of State and the Alabama Securities Commission, Smith was found to have withheld information and misrepresented variable annuity investments by promising unrealistic returns to investors. Smith’s parent company at the time, AGSI, was also found to have failed to adequately supervise Smith and his investment activities on behalf of AGSI.
Smith targeted these products to Chevron Pascagoula employees and convinced them to divert the bulk of their retirement investments into these annuities by promising unrealistic returns. The settlement with AGSI will ensure these Mississippians will recover some of their losses.”
In addition to the $175,278.58 to be paid to investors, AGSI will pay penalties to the state of $90,000 to fund investor protection programs and $40,000 in administrative costs. Under the agreement, AGSI was ordered to partially reimburse investors who purchased the variable annuity investments solicited by Smith on or after Jan. 1, 2000, until his retirement from the company. Investors eligible for reimbursement are those who have not entered into any litigation, arbitration, or previous settlement with AGSI.