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Regulation and Compliance > Federal Regulation > SEC

Firm Settles 403(b) Case

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A firm has agreed to pay a $50,000 fine to resolve U.S. Securities and Exchange Commission concerns about supervision of a registered representative convicted of charges related to rollovers into 403(b) products.

The SEC says AXA Advisors L.L.C., a unit of AXA S.A., Paris, should have kept Gordon Robert Moore, who had an office in Longmont, Colo., from persuading the teachers to roll about $1.6 million of 401(k) plan assets into the 403(b) plan products from June 2001 to July 2007.

Because the teachers continued to work for public schools that belong to the Colorado Public Employees’ Retirement Association and had not reached age 59.5, they were inelible for tax-free rollovers, SEC officials say.

In January 2008, Moore pled guilty to securities fraud, theft and computer crime, officials say.

Moore was sentenced to 2 years of probation and ordered to pay criminal restitution, officials say.

Moore also agreed to be barred from associating with broker-dealers and investment advisors, officials say.

AXA Advisors took active steps to address the problems caused by Moore’s actions, and “due in part to respondent’s remedial acts, the participants ultimately incurred no monetary harm,” officials say.

While Moore was soliciting the ineligible rollovers, “respondent failed to establish adequate procedures relating to rollover transactions,” officials say. “Respondent had inadequate supervisory procedures in place to review rollover transactions into customers’ existing accounts because supervisors were only required to review rollovers into new annuity accounts, not existing annuity accounts.”

“AXA Advisors terminated Gordon Robert Moore’s contract in 2007,” an AXA representative says in a statement about the SEC order. “We cooperated fully with the state and federal regulators’ in their investigation. Participants incurred no monetary harm as we took prompt action to reverse the rollover transactions, and we enhanced our monitoring procedures.”

A copy of an SEC order concerning the case is available here.


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