(Bloomberg) — Nationwide Mutual Insurance Co., the insurer whose slogan says it is “on your side,” will settle claims it delayed mail deliveries, allowing mutual funds underlying its products to be repriced before it carried out customers’ orders.
Nationwide agreed to pay $8 million to end the case, the U.S. Securities and Exchange Commission said Thursday in a statement. The SEC claimed that Nationwide delayed the mail at post-office boxes for a 15-year period through September 2011, so that buy and sell orders weren’t recorded until after a daily deadline for repricing the funds.
Nationwide processed the orders “at the next day’s prices in violation of the law,” Sharon B. Binger, director of the SEC’s Philadelphia office, said in the statement.
The policyholder-owned insurer said the agency didn’t allege that it benefited from the practice, or that some investors received preferential treatment.
“The SEC acknowledges Nationwide’s change in practices that occurred in 2011 and Nationwide’s cooperation in the investigation,” the Columbus, Ohio-based company said in an e- mailed statement. “Nationwide chose to settle this matter to bring closure and remain focused on the needs of its members.”
When customers used express or priority mail, which allowed them to track delivery times, Nationwide processed the orders the same day, the SEC alleged. The insurer arranged for normal pickup and delivery of regular mail for most business units, but had the mutual-fund orders delayed until after the 4 p.m. deadline, according to the statement.
Nationwide requested a meeting to complain to the post office after some orders were delivered on time, according to the SEC.