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Book Nook provides readers with insights into the world of books. Vick Mickunas takes you into the center of the publishing world with the latest book buzz, book reviews, and exclusive chats with authors..Home > Blogs > Book Nook > Archives > 2009 > May > 18 > Entry
Suze Orman sued for fraud…
Suze Orman, the financial wizard and author of numerous books on financial planning has been sued for fraud. According to an article in Forbes Magazine:
“The lawsuit was brought by the two adult children of Ann Garat. She bought long-term care insurance issued by a unit of CNA Financial, also a defendant, from an insurance agent working for the tiny Suze Orman Financial Group of Emeryville, Calif. The annual premium was $1,800. Court records suggest that Garat and Orman, then and now a licensed California insurance salesperson with an office in that Oakland suburb, shared a common devotion to an Indian guru.
Long-term care policies kick in if the insured needs help with daily activities like bathing or eating, or has cognitive impairment. The 30-page promotional brochure for Garat’s policy said paid caregivers “cannot be a member of your immediate family living with you.” The complaint says Garat was fine with that, since her children—including her daughter, a registered nurse—lived elsewhere, but nearby.
When Garat was diagnosed with ovarian cancer in 2001 and was weakened by chemotherapy treatment, the suit says, her kids took care of her. Garat later submitted reimbursement claims. CNA refused to pay in full, citing, among other things, fine print in the policy that it said barred payments to family members no matter where they lived. Garat died in 2007 at age 67.
The complaint, which seeks unspecified damages from CNA, Orman, her firm and others, quotes repeated advice in Orman books to buy long-term care coverage. (She has had endorsement deals with several carriers.) It also cites Orman’s declaration that a person’s financial adviser has the obligation “to make sure you understand all the ramifications of the policy.” The court file contains a 1999 disclosure statement from Orman herself saying she was an “investment adviser” to Garat with a “conflict of interest,” presumably due to a commission she received for the policy sale.”
Years ago, before Orman became such a huge success I was offered an interview with her. I turned it down. Financial planners were a dime a dozen. How could I have known that she would become famous?
Oh well….
Vick Mickunas
Permalink | Comments (2) | Post your comment | Categories: booms and busts
Comments
By Rob
May 19, 2009 3:25 PM | Link to this
I’ll bet you’re right, TRS. In fact, I imagine this has already gone further than the plaintiffs wished. Most likely they hoped for a satisfactory settlement offer out of the chute before filing, counting on Ms. Orman wishing to keep her name out of the papers in relation to a fraud suit. I’d imagine if she’s professionally insured anyway, that makes defending the claim a no-risk, no-brainer.By TRS
May 19, 2009 10:14 AM | Link to this
Vick - without seeing the language CNA may be on shaky ground here depending on the how the “living with you” exclusion reads. That being said, sounds like a typical lawsuit where the plaintiff counsel throws alot of mud against the wall to see what sticks. Most likely Orman has little to do with this and will buy out rather than defend because it is cheaper to do so. Such is the way the legal system works. Some would call it legal extortion.