Waddell & Reed Civil Complaint Is Dismissed

Waddell & Reed Financial Inc., a U.S. money manager that oversees $37 billion, said Wednesday that a California state court dismissed a civil complaint over commissions and accounting for its variable annuity assets.

The California Superior Court ruled against United Investors Life Insurance Co., a subsidiary of Torchmark Corp., Waddell & Reed said in a statement. Joyce Lane, a Torchmark vice president, said the Birmingham, Ala.-based holding company would appeal.

Waddell & Reed, which was spun off from Torchmark in 1998 and distributed United Investors’ annuities, has been engaged in lawsuits with the company since 2000. In March, an Alabama jury determined that Waddell & Reed should pay $45 million in punitive damages to United Investors. Waddell & Reed is seeking a reversal of that verdict.

The National Assn. of Securities Dealers filed an enforcement action over variable annuity exchanges against Waddell & Reed in January. The NASD said Waddell & Reed failed to properly advise variable annuity clients, costing them as much as $47 million in fees and commissions.

Waddell & Reed, based in Overland Park, Kan., said it was “aggressively defending” itself against the complaint, which is scheduled to be heard next year.

Shares in the company rose 34 cents to $22.60 on Wednesday on the New York Stock Exchange.