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Goldman, Sachs & Co. Fined $22 Million by FINRA, SEC

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The Financial Industry Regulatory Authority (FINRA) fined Goldman, Sachs & Co., New York, N.Y., $11 million for failing to supervise equity research analyst communications with traders and clients, and for failing to adequately monitor trading in advance of published research changes to detect and prevent possible information breaches by its research analysts.

The Securities and Exchange Commission (SEC) announced a related settlement with Goldman. Pursuant to the settlements, Goldman will pay $11 million each to FINRA and the SEC.

“Goldman’s trading huddles created an environment of heightened risk in which material non-public information concerning analysts’ published research could be disclosed to its clients. In addition, the firm did not have an adequate system in place to monitor client trading in advance of changes in its published research,” said Brad Bennett, FINRA executive vice president and chief of enforcement.

In 2006, Goldman established a business process known as “trading huddles” to allow research analysts to meet on a weekly basis to share trading ideas with the firm’s traders, who interfaced with clients, and, on occasion, equity salespersons. Analysts would also discuss specific securities during trading huddles while they were considering changing the published research rating or the conviction list status of the security. Clients were not restricted from participating directly in the trading huddles and had access to the huddle information through research analysts’ calls to some of the firm’s high priority clients. These calls included discussions of the analysts’ “most interesting and actionable ideas.”

In concluding this settlement, Goldman neither admitted nor denied the charges, but consented to the entry of the SEC’s and FINRA’s findings and admitted to certain facts that were part of a prior settlement with the state of Massachusetts.

In other industry news:

Securian Financial Group, St. Paul, Minn., subsidiaries Securian Casualty Company and Southern Pioneer Life Insurance were upgraded by A. M. Best.

Securian Casualty Company was upgraded to A – third-highest of 16 ratings. Securian’s recently acquired life and health company Southern Pioneer Life Insurance was upgraded by Best’s to A-. Best’s affirmed the A- ratings of American Modern Life, Balboa Life Insurance Company, Balboa Life Insurance Company of New York, Cherokee National Life and CNL/Insurance America. Minnesota Life Insurance Company, Securian’s largest subsidiary, had its A+ rating affirmed by Best’s.

The Retirement Plan Services of Lincoln Financial Group, Radnor, Pa., made enhancements to its LifeSpan customized model asset allocation program for employer-sponsored retirement plans.

Lincoln now offers plan sponsors and consultants the option to delegate the fiduciary responsibility associated with developing, monitoring and updating the model portfolios to the investment expertise of Ibbotson Associates. Ibbotson will create a series of model portfolios, including target date, target risk and retirement income, based on its patented lifetime asset allocation methodology. Ibbotson will use the plan lineup’s investment options, which undergo rigorous analysis and are carefully selected by plan sponsors and consultants, to implement the diversified model portfolios.

Under this program, plan sponsors or their consultants may choose from an array of model portfolios designed to accommodate varying participant investment objectives, including:

  • Target date models;
  • Target risk models;
  • Retirement income models for investors closer to retirement;
  • Combination target risk and date models offering participants a choice of conservative, moderate or aggressive glidepaths based on their years to retirement and risk preference.

The LifeSpan models may be offered as a Qualified Default Investment Alternative and also are available to ERISA and non-ERISA plans.

Northern Trust, Chicago, Ill. (Nasdaq: NTRS), named Michele Havens personal financial services (PFS) president of the Los Angeles region, including offices in Westwood and downtown Los Angeles. The appointment takes effect June 15. Havens currently serves as PFS president of the Seattle region.

Dino De Vita was appointed as the new PFS president of Seattle, also effective June 15. De Vita leads the private client services Segment and is currently based in Chicago.

In their new roles, Havens and De Vita will be responsible for managing financial consulting, investment management, trust and estate planning, as well as private and business banking across their regions.

Havens succeeds Susan Mallory, whose new role as global banking practice executive was announced last month. Mallory will focus on running the banking practice for private clients and will oversee the evolution of new product and service offerings including the expansion of specialized lending programs. Mallory will be based in the Westwood office.

Creative Marketing, Leawood, Kan., launched its Geared program, a comprehensive business consulting platform that assists individual producers with identifying their unique business challenges, clarifying their goals and objectives, and providing a plan to reach higher levels of success.

The proprietary program allows insurance agents and financial professionals to partner with a creative marketing sales consultant to target core areas of their business for improvement. Using the personalized results of an in-depth business review, a producer receives a customized marketing plan complete with action items to maximize the program’s effectiveness.

“This cutting-edge program better positions agents in all stages of their careers to pinpoint and overcome hurdles they face while meeting the evolving challenges of the industry. It ultimately helps producers attain entirely new levels of success,” said Steve Phillips, Creative’s chief sales officer.

Alliance Benefit Group, Peoria, Ill., partnered with the American Society of Pension Professionals & Actuaries (ASPPA) to enhance employee education within its national network of 13 licensees.

Alliance signed an enterprise education license with ASPPA to further expand the retirement plan knowledge base of its growing network of 1,000 employees by making topical webcasts and various industry resources available.

“Plan design, product offerings and fiduciary concerns are becoming increasingly complicated in today’s retirement planning industry,” said John G. Hopkins, IV, CPC, executive director of ABG. “Ever-changing legislation and regulations only compounds the complexity, making education paramount for our employees to best serve the needs of our growing client base.”

The ABG retirement education program includes access to over 30 ASPPA in-depth webcasts and will also provide continuing education credits to hundreds of credentialed employees in the ABG network as well as a series of webcasts covering the fundamental retirement plan knowledge critical for employees in the industry. 


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