New Hampshire Regulators Charge ING Over Fund Sales

The New Hampshire bureau began an investigation in 2004, after ING admitted in a financial filing that it had been subject to market timing and late trading of funds it managed for the state.

Market timing is a practice in which an investor, such as a pension fund, frequently trades a security, intending to take advantage of pricing inefficiencies to maximize profits. Where a fund administrator allows the practice, it can increase costs and harm overall fund performance for other investors.

In late trading, a fund allows a few select investors to buy mutual fund shares after the close of securities markets, which is not allowable under securities laws.

In October 2005, the National Association of Securities Dealers ordered ING to stop allowing market timing activities.

The New Hampshire securities bureau also says it believes fund brokers paid ING to participate in an ING sales network. That revenue-sharing arrangement created a conflict of interest for brokers that sold funds to the state employee deferred compensation plan, the bureau says.