Thursday, May 14, 2015

Nationwide Life Settles Charges Violating Pricing Rules for 8 Million Dollars

If you have an annuity with Nationwide Life you may want to read this. The SEC charged the company with routinely violating pricing rules in handling purchase and redemption orders for variable insurance contracts and underlying mutual funds.

Nationwide agreed to settle the charges and pay an $8 million penalty.

Pricing rules for mutual fund shares require an investment company to compute the value of its shares at least once daily at a specific time.  According to the SEC, Nationwide’s prospectuses stated that mutual fund orders received before 4 p.m. at its home office in Columbus, Ohio, would receive the current day’s price.  Orders received after 4 p.m. would receive the next day’s price.

The SEC alleges that Nationwide intentionally delayed the pickup of its mail at its PO Box, avoiding the requirement to process trades at the current day's price. It did however pick up its other mail from PO Boxes in a timely fashion.

Meanwhile, Nationwide did arrange for prompt pickup and delivery of U.S. Postal Service Priority Mail or Priority Express Mail that enabled contract owners to track an order’s time of delivery to the P.O. boxes.  Those orders were assigned the current day’s price.

 

For more than a 15-year period, Nationwide 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. - Sharon B. Binger, Director of the SEC’s Philadelphia Regional Office. 

The SEC's penalty will not compensate victims. If you have redeemed or purchased a Nationwide Life Insurance annuity and did so by regular mail, contact our office by email.

For more information - SEC Charges Nationwide Life Insurance Company With Pricing Violations

--- The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions and representation of investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email.

Post a Comment