August 5, 2005                                                         Contact:Lucas Hamilton

MORRISON ORDERS WADDELL & REED FINANCIAL ADVISOR TO STOP DOING BUSINESS IN MONTANA Temporary Cease and Desist Order Issued Against Bozeman Advisor, Registration and License Suspended


      Helena, Mont., August 5, 2005 - Today, Montana State Auditor John Morrison announced that his office has taken action to protect Montana consumers by suspending the insurance and securities license of Waddell & Reed, Inc.'s financial advisor, William Jelinek. Morrison issued a temporary Cease and Desist order on Wednesday, based on allegations from his securities and insurance departments that Jelinek had obstructed the department's investigation. At the same time, Morrison restrained the national brokerage firm, Waddell & Reed, Inc., and three of its Montana employees from violating the Montana Securities Act.
      Jelinek works in Waddell's Bozeman office selling variable annuities and other insurance and securities products. The Securities and Insurance Departments in the State Auditor's office have alleged, among other things, that Jelinek obstructed their investigation into possible wrong-doing involving the mass switching of United Investors Life Insurance Company variable annuities for Nationwide Insurance Company's variable annuities. The same group of Waddell's proprietary mutual funds supported both of these insurance companies' annuity products.
      "Protecting Montana consumers is our top priority," said Morrison. "Agents have a duty to best serve the needs of their clients. That certainly includes accurate reporting to our office."
      In an earlier action, the Securities and Insurance Departments alleged the switches from one variable annuity to another were done fraudulently and to the detriment of Waddell's customers. When Jelinek's customers received investigative questionnaires from the Auditor's Securities Department, the Department claims Jelinek either told his customers how to answer the questions or he actually answered them himself and returned them to the Department as if they were being sent from the customer. Additionally, the Departments assert that Jelinek made at least one switch without authorization from the customer.
      A violation of Auditor Morrison's order could result in felony criminal charges against the respondents.
      Montanans with questions may contact the State Auditor's securities department at 1-800-332-6148.