Hartford Boo-Boo
Nov 8, 2006 9:07 pm
Hartford pays $55M to settle chargesBy Aaron Siegel
November 8, 2006
Hartford (Conn.) Financial Services group Inc. agreed to pay $55 million to settle charges that three of its units failed to disclose their use of fund assets to pay for the marketing and distribution of Hartford's mutual funds and annuities.
The three subsidiaries - Hartford Investment Financial Services LLC, HL Investment Advisors LLC and Hartford Securities Distribution Company Inc. - agreed to relinquish $40 million in ill-gotten gains and pay a $15 million penalty.
Hartford Investment Advisors and HL Advisors were censured and ordered to cease and desist.
Hartford told shareholders in the funds' prospectuses that it used its own assets to pay for shelf space, the SEC said.
But, between 2000 and 2003, Hartford entered into arrangements with 61 broker-dealers in which it agreed to pay for special marketing and distribution benefits using $51 million of the Hartford funds' assets in the form of brokerage commissions, according to the SEC.
The $55 million will be distributed to the affected Hartford funds.
The three subsidiaries - Hartford Investment Financial Services LLC, HL Investment Advisors LLC and Hartford Securities Distribution Company Inc. - agreed to relinquish $40 million in ill-gotten gains and pay a $15 million penalty.
Hartford Investment Advisors and HL Advisors were censured and ordered to cease and desist.
Hartford told shareholders in the funds' prospectuses that it used its own assets to pay for shelf space, the SEC said.
But, between 2000 and 2003, Hartford entered into arrangements with 61 broker-dealers in which it agreed to pay for special marketing and distribution benefits using $51 million of the Hartford funds' assets in the form of brokerage commissions, according to the SEC.
The $55 million will be distributed to the affected Hartford funds.
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