The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:SEC Smites Nationwide Over Mutual Funds, Sort Of Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 14, 2015

SEC Smites Nationwide Over Mutual Funds, Sort Of

Reported by Neil Anderson, Managing Editor

Nationwide [profile] just got hit with an $8-million penalty that involves its mutual fund business but is actually about a different product line.

Today the Securities and Exchange Commission (SEC) revealed charges that Nationwide Life Insurance Company, in the words of Sharon Binger (director of the SEC's Philadelphia regional office), "intentionally delayed the delivery of untracked mail containing orders from customers and processed them at the next day's prices in violation of the law," in this case rule 22c-1. The orders that the SEC claims were delayed were for variable annuity and variable life insurance products, and for the mutual funds underlying those products. Nationwide agreed to the settlement, including the $8-million penalty, with the standard disclaimer of not admitting to or denying the findings. [See the SEC's settlement and cease-and-desist order.}

A spokesman for Nationwide emailed MFWire the following statement:

Nationwide and the U.S. Securities and Exchange Commission (SEC) recently agreed to resolve an SEC investigation into the timeliness of Nationwide’s processing of financial transactions in variable annuity and variable life policies sent via non-Priority U.S. Mail to P.O. Boxes prior to September 2011. There were no allegations that Nationwide benefitted from its P.O. Box mail processing practices or the process benefitted certain groups of investors over others. The SEC acknowledges Nationwide’s change in practices that occurred in 2011 and Nationwide’s cooperation in the investigation in the SEC’s order. Nationwide chose to settle this matter to bring closure and remain focused on the needs of its members.

The SEC accuses Nationwide of purposefully delaying receipt of orders until after the 4pm deadline, by dividing the variable annuity and variable life business mail from the rest of its mail. That way, the SEC claims, Nationwide's mail couriers could pick up other mail throughout the day and deliver it to Nationwide's Columbus, Ohio headquarters while leaving the orders to be picked up later to ensure "late delivery". And the SEC says that Nationwide even told the couriers not to bring the variable annuity and variable life mail into Nationwide's building until 4:01pm at the earliest. The charges even say that Nationwide employees complained to the post office when variable annuity and variable life mail got mixed in with the rest of the mail and delivered earlier in the day.

The charges cover the period from October 1995 through September 2011.

This settlement with the SEC comes five months after Nationwide agreed to a different, $140-million settlement in a private lawsuit around mutual funds' revenue sharing payments in Nationwide-run 401(k) plans. 

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2023: Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

  1. MFDF webinar - The SEC's Swing Pricing and Liquidity Proposal: What You Should Know, February 1
  2. Exchange: an ETF Experience, Feb 5-8
  3. WE US - Breakfast at Nobu Hotel, February 6
  4. MFDF Director Discussion Series - Open Forum (Stuart, FL), February 7
  5. 8th Annual Expect Miracles in Manhattan, February 16
  6. MMI Next Chapter: Rockin' Retirement, February 21
  7. Expect Miracles Boston YPEM Battle of the Bartenders, February 28
  8. MFDF webinar - Fund Industry Claims Trends: An Insurer's Perspective, March 1
  9. Nicsa Strategic Leadership Forum 2023, Mar 1-3
  10. IMEA Data Council Summit, Mar 7-8
  11. MFDF 2023 Fund Governance & Regulatory Insights Conference, Mar 9-10
  12. Irish Funds Boston Breakfast Seminar, March 15
  13. Irish Funds New York Seminar, March 16
  14. 2023 ICI Investment Management Conference, Mar 19-22
  15. FRA's Mastering Client Services and RFPs for Institutional Investors, Mar 20-21
  16. Crane Data's Bond Fund Symposium, Mar 23-24
  17. 2023 MMI Summit, Mar 29-30
  18. MFDF Director Discussion Series - Open Forum via Zoom, March 29
  19. 34th Sub-Advised Funds Forum, Apr 3-4
  20. MFDF webinar - Impact of Market Performance on 2022 Annual Investment Firm Profitability and Economies of Scale, April 5
  21. MFDF Regulatory Impacts on Fund Boards, April 20
  22. Morningstar Investment Conference 2023, Apr 25-27
  23. MFDF In Focus: Board Oversight Lessons from Former Fund Directors, May 9
  24. 2023 MMI Emerging Asset Managers Forum, May 11-12
  25. WE US - breakfast at InsideETFs, May 22
  26. MFDF Director Discussion Series - Open Forum (Columbus, OH), June 1

©All rights reserved to InvestmentWires, Inc. 1997-2023
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use