SEC Joins Variable Annuity Probe against RBS

July 19, 2005 ( - The US Securities and Exchange Commission (SEC) is joining the probe of the Royal Bank of Scotland (RBS) over claims that it missold products to US pensioners.

A Billings Gazette report said an existing case filed by Massachusetts state regulators against RBS subsidiary Citizens Financial focuses on “unethical and dishonest conduct” in its annuity sales practices with elderly customers.

At least part of the SEC’s interest in the case is because Citizens can’t provide SEC-required documentary evidence of its sales activities, the report said.

Citizens Financial is one of several US banks being investigated by the Massachusetts Securities Division over the sale of variable annuities, the report said.

Authorities are investigating whether variable annuities were sold to pensioners who were unaware of the risks. Income from variable annuities depends on how well underlying investments perform.