Finra Panel Orders Minnesota Life, Ex-Securian Rep To Pay Clients Almost $1M

A Finra arbitration panel has ordered Minnesota Life Insurance Company and a former rep with Securian Financial Services to pay almost $1 million to a California couple who claimed they were steered into putting a major cash infusion into a variable life insurance policy, resulting in inflated premiums and huge commissions for the reps.

The Financial Industry Regulatory Authority ordered Minnesota Life and Brian Freeman to pay $295,200 in compensatory damages to Daniel M. Shapiro, an attorney who until recently worked in Altadena, and his wife Rhoda Shapiro, who is the beneficiary of Daniel’s defined benefit plan. The panel also awarded the couple $106,720.00 in damages for return of commissions; $246,312.00 in costs for expert witness fees; $293,355.00 in attorneys’ fees; and $33,710.00 in costs for the stenographer. The total was about $975,000 in fees and damages against Freeman and Minnesota Life, a subsidiary of Securian.

Calls to Securian and Freeman were not returned. Two other reps were named in the filing but were not held liable in the Finra arbitration. Freeman is now listed as an advisor at Cetera, which bought Securian in 2023.

When contacted by Financial Advisor, Daniel Shapiro said tha he was told by Freeman to put $270,000 into a long-standing policy in 2022, but it generated a $107,000 commission for the advisor.

“When we were 75 years old, we made substantial cash injections into a policy to extend its coverage to age 85. What was supposed to be a lump sum input turned into a policy change with huge commissions and new policy charges and that was the $107,000. … The main thrust is that this was a security and there was no best interest analysis done.”

According to a filing by the Shapiros in the California Superior Court in Los Angeles County, their original policy bought in the 2000s was at first a term and then a variable adjustable life policy worth $2 million. The Shapiros claim that Freeman told them that after a $275,000 lump sum injection, their premiums on the policy would be $24,000 per year “through the age of 85. Instead, the policy Freeman arranged required an annual premium of $147,600.00.”

The Shapiros in the state filing called the Minnesota Life insurance policy “inherently deceptive” and “abusive.” They also said it encourages agents “to impose policy acquisition charges and pay its agents sales commissions over and over again for the same policy, which is unheard of wholly inconsistent with the market.”

They sued for “intentional mispresentation including omission of material facts; negligent misrepresentation; professional liability; breach of fiduciary duty; breach of contract; financial abuse of an elder.”

The state court ordered the case to be heard in Finra arbitration, according to Freeman.

Shapiro said that he is still a practicing attorney, but has moved his practice to San Diego after losing his house in the 2025 Los Angeles wildfires, which were particularly devastating in Altadena, where he lived and practiced.

He said that he is continuing to pursue state charges against Minnesota Life in a class-action suit and claims there are tens of thousands of such policies outstanding.