The National Association of Securities Dealers Inc. has imposed a $5 million fine on 3 securities units of MetLife Inc.
The units are MetLife Securities Inc., New York; New England Securities Inc., Boston; and Walnut Street Securities Inc., St. Louis.
The units provided inaccurate and misleading information to the NASD, allowed late trading of mutual funds, and failed to answer NASD questions sent through electronic mail in a timely fashion, according to officials at the NASD, Washington.
The MetLife securities firms settling the investigation have “neither admitted nor denied the charges, but consented to the entry of NASD’s findings,” NASD officials say.
“We’re pleased to put this matter behind us,” says John Calagna, a spokesman for MetLife, New York.
The NASD asked the MetLife units about possible late trading of mutual funds in September 2003, officials say.
Over the following 18 months, the units “provided inaccurate and misleading responses despite having learned information raising serious questions about the accuracy of those responses,” NASD officials say. “The responses were coordinated by a working group consisting of employees from the 3 firms, staff from various departments of MetLife Group, Inc., and an outside law firm.”
The securities units knew in June 2004 that internal auditors had found some late trades, but they waited until December 2004 to tell the NASD that the auditors had discovered 800 late trades, officials say.
In addition, the working group knew that the securities units did not have adequate procedures to monitor, detect or prevent late trading, but they failed to tell the NASD about those weaknesses, NASD officials say.
“Ultimately, this case should send a strong message that NASD expects firms to provide accurate information to regulatory inquiries in a timely manner – and that failures to provide accurate information will draw severe sanctions,” James Shorris, an NASD executive vice president, says in a statement.