The Financial Industry Regulatory Authority fined Prudential $1 million for retirement plan investment-related violations from “at least” January 2010 to June 2017, according to FINRA.
Without admitting or denying the findings, Prudential signed a FINRA letter of acceptance, waiver and consent Dec. 19 in which it consented to the fine, as well as a censure and to comply with various requested initiatives designed to make the company compliant with FINRA rules. FINRA accepted the letter Tuesday.
In a statement provided to ThinkAdvisor on Wednesday, Prudential said: “Transparency, doing the right thing, and maintaining constructive relationships with regulators are foundational to how Prudential conducts business. Upon discovery of the issues following a FINRA inquiry, Prudential conducted a thorough review, reported its findings, and fully cooperated with FINRA. We have taken action to address the issues and are pleased to have this matter resolved.”
However, according to FINRA, “during at least the period January 2010 to June 2017,” Prudential Investment Management Services “provided employer sponsors and employee participants, in retirement plans administered and/or maintained by the Prudential Retirement business unit … with inaccurate expense ratio information and historical performance information for numerous investment options in defined contribution plans” offered through group variable annuities.
In addition, from at least October 2003 to December 2018, PIMS “provided inaccurate third-party ratings for investment options in retirement plan Group VAs,” FINRA said in the letter. The firm “made these misstatements in nine different types of communications, including customer statements and quarterly fact sheets,” according to FINRA.
Last, from at least January 2004 to September 2019, in “multiple client-facing publications, PIMS provided performance data for money market funds available as investment options in retirement plans, but failed to provide ‘Seven-Day Yield’ information as required” by the SEC’s Rule 482(e) under the Securities Act of 1933, FINRA said.