Nationwide Life Insurance will pay an $8 million penalty to the U.S. Securities
and Exchange Commission over variable annuity and life insurance policy errors
Nationwide Life Insurance Co., based out of
Columbus, Ohio, agreed to pay $8 million over what the SEC says were deliberate delays
in the receipt of variable annuity and life insurance policy orders which
resulted in the failure to price policies in a timely manner.
The SEC says that during a 16-year span from October 1995 through September
2011, Nationwide instructed its mail couriers to avoid picking up orders
until the end of the trading day (after 4:00 p.m. Eastern) even though
many orders were received early in the morning. This delay allegedly violated
Rule 22c-1, which requires that all orders received prior to 4:00 p.m.
must be valued at the current day’s price, while orders received
after 4:00 p.m. must be valued at the next day’s price.
The SEC also found that Nationwide actually complained to the post office
on several occasions that due to a mix up of regular mail with variable
orders, some of the orders were delivered prior to 4pm.
Afterward, according to the SEC's complaint, Nationwide met with post
office employees and “stressed that it needed 'late delivery'
of variable contract mail 'due to regulations that require Nationwide
to process any mail received by 4 p.m. the same day.'”
Some of the couriers deliberately delayed their arrivals at the carrier's
home office by making pit stops to get gas or buy food, according to the
Upon settling the SEC’s claims, Nationwide issued a statement stating
that there was no allegation that Nationwide directly profited from the
rule violations or benefitted certain investors over others.
Since 1999, the investment fraud attorneys at Meyer Wilson have been helping
investors recover their losses caused by investment fraud and misconduct.
Failures of financial institutions to supervise their brokers and internal
procedures could spell harm for the investor. Contact us today and we
can provide a
free evaluation of your case and inform you of your legal rights and options.
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