A class action has been filed against A.G. Edwards (NYSE:AGE), and its officers and directors by stockholders who purchased the company's common stock between January 1st, 1990 and February 3rd, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. A.G. Edwards is a holding company that, through its subsidiaries, provide securities and commodities brokerage, investment banking, trust, asset management, financial and retirement planning, insurance products, and other related financial services.

According to a press release dated, February 4, 2005, the complaint alleges that during the Class Period, A.G. Edwards made false and misleading statements and omitted material facts concerning its undisclosed financial interests with third party suppliers of annuity contracts. The third parties paid monies and other incentives to have Variable Annuities steered to them by A.G. Edwards without properly disclosing the preexisting arrangement to its customers.

The complaint further alleges that rather than providing independent and unbiased services for clients wanting to purchase Variable Annuities, A.G. Edwards maintained secret contingent fee sharing agreements with a number of insurance company underwriters of annuity contracts. These activities cause insurance companies to collect higher premiums than would be paid absent these arrangements and result in A.G. Edwards customers paying inflated premiums for the Variable Annuities.

According to the press release, a variable annuity is an insurance contract with characteristics causing it to be treated as an "investment" under the Securities Act of 1933. A Variable Annuity contract generally provides that the purchaser agree to a simple "lump sum" premium or scheduled fixed premiums for a pre-set number of years. The premiums are deposited into a separate account after deducting expenses, fees and charges specified in the contract. The premiums thus collected in the annuitant's separate account are available for tax deferred investment in one or more portfolios (called sub-accounts). Upon maturity of the annuity, the annuitant receives payment from the accumulated value in such amounts and upon the terms specified in the underlying investment contract.

If you bought A.G. Edwards securities between January 1st, 1990 and February 3rd, 2005., inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.