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June 26, 2007 at 04:00 PM
Federal regulators have imposed $19 million in penalties on mutual fund and variable annuity units of a large financial services company.
The U.S. Securities and Exchange Commission has negotiated the settlement to resolve allegations that four John Hancock companies, units of Manulife Financial Corp., Toronto, used fund and VA assets to pay more than 55 broker-dealers through revenue-sharing arrangements.
The Hancock companies made some disclosures about broker-dealer compensation in fund and VA documents, but the disclosures were not adequate enough to warn either investors or the fund and VA trust boards about conflicts of interest, SEC officials say.
The Manulife units have accepted the terms of the SEC settlement without admitting or denying the findings in the settlement order, officials say.
“The practices that are the subject of this settlement ended long ago,” Hancock says in a statement about the SEC settlement. “We have cooperated fully with the SEC and are pleased to put this matter behind us.”
Long before the current settlement was announced, Hancock examined its revenue-sharing practices, the company says.
