Waddell & Reed Chairman Steps Down

Waddell & Reed Financial Inc., a U.S. money manager with $38.2 billion in assets, said Wednesday that Keith Tucker resigned as chairman and chief executive a month after it settled allegations that it pushed products on customers to boost fees.

The company’s president, Henry Herrmann, replaced Tucker as CEO. Alan W. Kosloff, an independent member of the board, was named nonexecutive chairman, the Overland Park, Kan.-based company said in a statement.

Waddell & Reed has grappled with client withdrawals and legal battles in the last year. Last month the company agreed to pay a total of $32.5 million to settle allegations by regulators of improperly selling variable annuities as well as a lawsuit filed by Torchmark Corp., its former parent.

“For some time now, I have been devoting significant energy toward resolving matters involving major litigation,” Tucker, 60, said in the statement. A voicemail left for him wasn’t returned.

Waddell & Reed spokeswoman Nicole McIntosh said the decision to resign was “mutually agreed” upon by Tucker and the firm’s board.

She said Tucker “felt comfortable” to step down with the company’s legal issues resolved. She declined to comment further on his reasons.

Tucker’s resignation was announced after the market closed. Shares of Waddell & Reed ended down 13 cents to $17.59.

Waddell & Reed is trying to revive sales of mutual funds and annuities through its 2,000 financial advisors. In April, the company reported that first-quarter earnings fell 18% to $22.8 million as investors pulled money from funds for a fifth consecutive quarter.

Waddell & Reed was the target of a probe by the NASD, formerly the National Assn. of Securities Dealers, which accused the company last year of harming more than 5,000 clients by advising them to switch their variable annuities, which earned the company extra fees.