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The Daily Brief

FINRA Claims AXA Misrepresented 401(k) Funds to Over 6,000 Clients

The broker/dealer owes $772,000 in fines and restitution, according to a FINRA sanction against the firm.

A week after being ordered by a FINRA arbitration panel to pay $3.2 million to an elderly couple, AXA Advisors must pay $772,000 in fines and restitution for misrepresenting funds to 6,200 participants in its 401(k) retirement plan.

According to the Financial Industry Regulatory Authority, AXA distributed thousands of enrollment forms and investment options attachments that mispresented certain bond funds for 401(k) plans as "investment-grade," while "a substantial portion of the funds' portfolios consisted of high-yield or junk bonds."

The fund that affected the largest number of participants was represented as investment-grade while 65% of its portfolio was in high-yield bonds. 

"Investors need accurate information to make informed decisions about their retirement savings, and member firms play a critical role in providing complete and accurate information to retirement plan sponsors," said Susan Schroeder, FINRA's executive vice president, Department of Enforcement.

“We remain committed to transparency and accuracy in all communications and we regret this occurred," said an AXA spokesperson. "We are pleased to have resolved this matter and are providing remediation to those who may have been adversely impacted.”

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