WASHINGTON — A group of California attorneys has filed a class-action lawsuit against First Command Financial Planning that could result in payouts to military investors not included in last year’s federal settlement.

The lawsuit, filed in the U.S. District Court of Southern California, asks for compensation for members of First Command’s systematic investment plan, saying the company used “false and misleading marketing” in its dealings with troops.

First Command officials dismissed those accusations.

“First Command Financial Planning is proud of its years of service to hundreds of thousands of military families,” said Paul Cozby, a company spokesman. “We believe the complaint filed in San Diego contains numerous factual inaccuracies and erroneous conclusions, and we intend to vigorously defend the matter.”

In December, federal regulators announced First Command would refund about $4 million to customers who bought and sold the systematic investment plans between 1999 and 2004.

That settlement came after an investigation found the company’s salespeople had misled military personnel about costs and returns associated with the plan. Company officials did not admit to or deny the charges, but have since stopped offering those funds.

Anyone who bought a systematic investment plan before Dec. 15 and did not sell the plan before that date could be eligible to join the class-action suit, according to Norman Blumenthal, one of eight attorneys already signed on to the suit.

Blumenthal said the goal is to help customers not included in the federal settlement, but also “punished” by First Command’s sales practices.

“You shouldn’t put military personnel in a position where you’re taking that much money away in fees,” he said. “We think it’s a bad plan.”

The systematic investment plans took as much as 50 percent of investors’ first-year savings in broker fees and, the lawsuit states, higher-than-needed fees after that. Salespeople for the firm also are accused of lying about the likelihood of recouping that money, and misleading customers about better investment plans.

Blumenthal said First Command customers do not need to sign up to become part of the class — if a settlement or verdict award is reached, all those eligible will be able to recover money — but he is encouraging military personnel he speaks with to talk with a financial adviser about their investments.

“We’re telling people there is no reason to stay in this plan,” he said.

A lead plaintiff for the case is expected to be named by May 1, at which point the courtroom process will begin.

In addition to the $4 million in refunds it was ordered to pay in the December federal settlement, First Command agreed to an $8 million fine to be used to set up an investment education program for military personnel.

Sign Up for Daily Headlines

Sign up to receive a daily email of today's top military news stories from Stars and Stripes and top news outlets from around the world.

Sign Up Now