24 People Claim Deception by Great Western

About two dozen mostly elderly Southern Californians who claim they were tricked into money-losing mutual fund investments by Great Western Financial Corp. securities advisers staged a mild-mannered protest in front of the giant savings and loan’s Chatsworth headquarters Tuesday morning.

The gray-haired demonstrators, most of them plaintiffs in a pair of securities suits filed against Great Western two weeks ago, didn’t march, chant or engage in name-calling. But they posed for TV news crews and hoisted white placards scribbled with laments including, “I lost $23,000 at Great Western,” and “I want my money back.”

The protest was timed to coincide with the start of Great Western’s annual shareholder meeting at 11 a.m. Several demonstrators said they lost thousands of dollars by investing in the Sierra U.S. Government Bond Fund, one of 16 mutual funds offered by Great Western as part of its Sierra family of investment products.

Wilma Harris, 64, of Anaheim Hills, said she invested $10,626 in the bond fund in 1991 after Great Western securities salespeople told her she could get a better return there than she could by reinvesting her money in a certificate of deposit account.

Harris said she was led to believe that because the fund invested in government securities, it would be a safe place for her money. “They said that the only way I could lose money was if the government went under,” she said.

But in December, Harris said, after watching her investment shrink in the face of a poor bond market last year, she cashed out of the fund, and other investments at Great Western, at a $2,500 loss. “This is money my mother had left me,” Harris said. “I thought it was safe.”

Great Western denies any deception, and company officials are quick to point out that investors in any mutual fund product are required to sign forms acknowledging that they know the funds are not federally insured, and that their principal investment could shrink.

Minutes after the protest started, Great Western officials refuted the demonstrators’ claims at a press conference inside the company’s headquarters. “These customers were aware of the nature of their investments,” said Ian Campbell, a company spokesman. “No one has lost a life savings. . . . and many would have recouped (their investments) if they had not sold prematurely.”

Michael Linfield, a Pasadena attorney who represents investors in the class-action suit, acknowledged his clients had signed documents acknowledging the risks of their investments, but said most of his clients are “financially unsophisticated senior citizens” who didn’t understand what they were signing.

Joseph Emma, 53, of Huntington Beach, said he lost $8,000 in the Great Western bond fund and that he agrees with Linfield’s assessment. “I signed papers but it was all in typical legalese,” said Emma, accepting a cold soda from a Great Western employee. “To say I’m unsophisticated would be an understatement.”