Cape couple to recoup more than $83K from insurance settlement

More than $83,500 taken from an elderly Cape Girardeau couple has been recovered, Secretary of State Jason Kander announced Wednesday.

The settlement comes from previous action taken by Kander's office against an insurance agent in Cape Girardeau, according to a news release from his office.

The consent order stated the couple had expressed concern over their ability to afford premium payments on insurance policies, but former agents of Bankers Life and Casualty Company, Harry Ward and Manzur Mazumder, convinced the couple to set up a brokerage account at ProEquities Inc. Then, Ward would use "an investment strategy in covered calls to generate enough income to cover the premium payments on the policies," Kander's office said.

The order alleged ProEquities failed to reasonably supervise Ward, who sold universal insurance policies issued by Bankers Life to the Cape Girardeau couple. Kander's office said the call strategy he used with the couple's ProEquities brokerage account was "unsuitable" and that trades made in the account resulted in losses and failed to generate the income necessary to pay the policy premiums.

ProEquities agreed to pay $83,528 in restitution and interest to the couple, in addition to $40,000 in fines and $5,000 to cover the costs of the investigation. It has also reviewed its policies, procedures and controls, provided additional training to agents on options trading, enhanced annual compliance training to protect elderly clients and improved monitoring of the sale of covered calls such as those used by Ward, all as a result of the investigation.

In May, Kander's office reached a settlement with Bankers Life for more than $57,000 after taking action against Mazumder.

The secretary of state asks anyone considering making an investment decision to first consult his office at 1-800-721-7996 or MissouriSafeSavings.com.

"Before investing your hard-earned savings, make sure you understand the costs and penalties on transactions made in your account," Kander said in the news release. "If an investment or an investment strategy sounds too good to be true, then it probably is."

Pertinent address:

Cape Girardeau, Mo.