(Reuters) – An investment advisory unit from American International Group Inc. has agreed to pay about $ 40 million so as not to expose teachers and other clients' conflicts of interest and practices that generated millions of dollars for the company, the US Securities and Exchange Commission said on Tuesday.
VALIC Financial Advisors Inc., a financial services provider in all but two Florida school districts, failed to disclose that the parent company paid for a for-profit unit owned by Florida K-12 teachers. unions, and also failed to disclose that it received millions in financial benefits from advisory investment funds, the SEC said in a statement.
The AIG subsidiary did not recognize or deny the SEC's results.
A spokesman for AIG said the company was taking "all necessary steps to ensure a robust program for improvements in disclosures and improvements in governance."
The VFA failed to disclose to some teachers that the company provided cash and other financial benefits to a company owned by the Florida K-1
Three full-time VALIC employees were identified "fraudulently" as employees of the teachers' union unit, the supervisory authority said in a fee document. They increased VALIC's access to K-12 teachers, according to the SEC.
VFA earned more than $ 30 million on the products it sold to Florida K-12 teachers during the period, the SEC said.
The company has agreed to pay a $ 20 million penalty and cap counseling fee to teachers at its lowest rate to resolve the issue, the SEC said.
In separate fees, the regulator stated that VFA received fees related to the sale of fund products and provided false and misleading information about these financial benefits. The company agreed to repay $ 15.4 million in bad interest and a $ 4.5 million civil penalty.