The National Association of Securities Dealers has imposed a $325,000 fine in connection with allegations about variable product sales.[@@]
The NASD has accused the firm, Hornor, Townsend & Kent Inc., Horsham, Pa., of conducting several sales contests to promote variable life and variable annuity products in violation of securities regulations barring incentives for sale of particular instruments within a product line.
The firm also was cited for e-mail and supervision violations.
Hornor, Townsend has neither admitted nor denied the charges, but it has consented to the entry of the NASD’s findings, the NASD says.
Hornor, Townsend is a unit of Penn Mutual Life Insurance Company, Philadelphia.
“The matters the NASD is referring to occurred prior to 2003, specifically between 2001 and 2003,” Pat Beauchamp, a company spokeswoman, says in a statement. “HTK has already reviewed our processes to improve and strengthen certain of our internal controls and procedures so that we can continue to focus on needs-based selling and what is in the best interests of the client.”
The enforcement action was the first since the NASD announced in April that it is reexamining its policies regarding sales contests used to sell variable annuities. That decision followed the filing of several private lawsuits against large brokers alleging that improper incentives were offered the brokerages by the underwriters of the products.