A legal challenge has been launched in the U.S. District Court for the Southern District of California. The case, titled Nietz v. LPL Financial LLC, is assigned the docket number 3:26-cv-03383-JES-DEB. The lawsuit claims that LPL Financial failed to inform its clients about financial instability at Phoenix, specifically concerning insurance products like annuities and life insurance. Investors who acquired these products through LPL advisors are part of a proposed class in the case.
Credit agencies began downgrading Phoenix’s financial rating as early as 2009, prompting LPL to remove the company’s insurance products from their recommended platform and cease offering them for sale. Despite this, according to the filing, LPL did not notify current policyholders about the changes. It continued to manage these accounts and collect trail commissions from the policies over time.
Ongoing Legal Action in Illinois
The move resulted in restrictions on policy surrenders, withdrawals, and certain death benefit payments. Meanwhile, another related case, Jason et al. v. 25-cv-14507, is unfolding in the U.S. District Court for the Northern District of Illinois. That litigation involves similar claims about State Farm’s alleged failure to disclose PHL's financial condition while servicing policies.
Kerry Nietz, the plaintiff, seeks class certification to include a nationwide group affected by these actions, along with additional relief outlined in the legal documents.
Kerry Nietz is represented by the law firms Bursor & Fisher, P.A. and Edward Stone Law P.C., which have also taken up similar claims against State Farm regarding Phoenix/PHL insurance products. The legal teams are actively pursuing remedies for policyholders who were allegedly misled or not properly informed about financial changes at the insurance issuer.