TIAA-CREF Individual & Institutional Services LLC agreed to pay $97 million in restitution to thousands of customers who were misled into moving their retirement savings into higher-fee investments, New York Attorney General Letitia James said.
The settlement resolves actions by both James’s office and the Securities and Exchange Commission.
The financial services company pushed customers from 2012 to 2018 to move their investments from low-cost employer-sponsored plans to individually-managed accounts that were significantly more expensive but generated higher fees, James said in a statement Tuesday.
“TIAA made hundreds of millions of dollars misleading clients and pressuring them into higher-cost investments that picked away at tens of thousands of investors’ retirement accounts,” James said. “TIAA relied on its reputation as a trusted and objective financial advisor to profit off of clients through fraudulent and manipulative sales practices.”
Chad Peterson, a spokesman for TIAA, said the firm cooperated with regulators and had begun improving practices even before they came under scrutiny.
“We regret the times that we did not live up to our clients’ expectations of us,” he said. “We have learned some valuable lessons and have applied those lessons to enhancing our training, supervisory controls and disclosures.”
TIAA, which is known as provider of insurance and retirement products for teachers, has no publicly traded stock.
This article was provided by Bloomberg News.