Waddell & Reed Financial Inc.

In 2001 and 2002 the money managing company exchanged 6,700 variable annuities written by United Investors Life Insurance Company for annuities written by another insurer. The National Association of Securities Dealers filed a lawsuit against the company alleging the exchanges forced Waddell & Reed customers to pay $11 million in surrender charges. The NASD is set to receive a $5 million settlement and Torchmark Corp. will get a $14.5 million settlement. An $11 million restitution fund will also be set up for variable annuity clients and Waddell has also agreed to pay a $2 million settlement to a consortium of states for their investigation. (Apr-29-05) [NATIONAL UNDERWRITER]