NH Accuses ING of Fraud

June 9, 2006 (PLANSPONSOR.com) - Officials from the New Hampshire Bureau of Securities Regulation have requested that ING Financial Advisors hand over e-mails and other internal reports, accusing the Netherlands-based company of fraud, according to the New Hampshire Union Leader.

State securities regulators are charging ING with mishandling state employees’ 401(k) plan monies by:

  • delaying actions against market timing,
  • moving retirement savings from a mutual fund into another garnering higher fees for ING without permission,
  • making unwritten revenue sharing deals with other mutual fund companies, and
  • failing to retain emails relating to the state’s charges.

The state also alleges that the company based its mutual fund choice on whether those funds would help ING achieve revenue goals, while telling the state that it had picked the best-performing stocks, according to the newspaper.

New Hampshire alleges that ING was misleading regarding the market timing issue because the company told the state that market timing did not affect the plans’ earnings.  ING invests about $180 million for workers and retirees in 401(k) funds and the fund’s losses are estimated to be in the six figure range.

Bureau of Securities Regulation deputy director Jeffrey Spill has asked for a cease and desist order against ING, along with fines, restitution and a finding that ING’s licenses ought to be revoked or suspended.

In 2004, according to the Insurance Journal, the Securities and Exchange Commission began investigating ING for market timing. In 2005, ING paid $2.9 million and was censured for improperly practicing market timing (See ING Fined for Market Timing Violations ).