A group of activist seniors wants Great Western Financial Corp.'s board of directors to either address their complaints about deceptive investment sales practices - or put the thrift's brokerage on the block.
Seniors Against Investment Fraud, a 300-member California-based group of retirees, has a slate of directors ready to run for seats on the board of the Chatsworth, Calif., thrift if its response is not satisfactory, a lawyer for the group said.
"We want a change in policies and sales culture so customers are no longer misled about the risk of the mutual funds being sold," said Michael Linfield, an attorney who is representing senior citizens in a class action filed against Great Western last year.
The group is now going directly to the board because Great Western has stalled its lawsuit with appeals, Mr. Linfield said.
"The plaintiffs want their day in court," he said. "They don't want to die while Great Western pursues appeals."
Ian D. Campbell, senior vice president and spokesman for Great Western, said he finds it "peculiar" that Mr. Linfield and his clients are pursuing this avenue now, when Great Western is in "serious settlement discussions" with the plaintiffs.
He also said it is ironic that Mr. Linfield is calling for Great Western to review its sales practices as the thrift considers the sale of its proprietary mutual fund family, the Sierra Funds.
Mr. Linfield represents some 22 plaintiffs in Rosenthal v. Great Western, a suit initiated by 96-year-old Ruby Rosenthal. Mrs. Rosenthal says she lost $40,000 in a mutual fund she bought at Great Western when a certificate of deposit she had there matured.
The case states that Ms. Rosenthal was unaware the fund was not insured by the government.
Ms. Rosenthal's daughter, Norma Resnick, who is also a plaintiff and is chairwoman of Seniors Against Investment Fraud, said she wants the bank to change its sales practices to protect vulnerable senior citizens.
"We want to put people on the board to protect customers," said Ms. Resnick.
Mr. Linfield said selling the Sierra fund family to another financial institution would be a step in the right direction for Great Western. Brokers at Great Western's broker-dealer are rewarded for selling Sierra Funds to customers, he explained.