NML Fined for "Lack of Supervision"........

[FinanceDude]

The latest in a series of fines NML has been hit by......

Paul Gores is a reporter with the Milwaukee Journal, and covers business topics........

THURSDAY, June 28, 2007, 11:41 a.m.
By Paul Gores</B>


Northwestern Mutual fined $100,000


The National Association of Securities Dealers said today it has fined the investment unit of Northwestern Mutual Life Insurance Co. $100,000 for failing to have adequate supervisory systems and procedures to ensure clients received opportunities to transfer mutual funds without a front-end sales charge.

The violations occurred between 2002 and 2004. During that period, the NASD said, many mutual fund families offered transfer programs that eliminated front-end mutual fund sales charges for certain customers. Some clients incurred front-end sales charges they should not have paid during that period, the NASD said.

Northwestern Mutual already has paid partial remediation of $242,000 for clients involved, and is working with a third-party auditor to identify others. The NASD, which is a self-policing body for the securities industry, said Northwestern Mutual's fine was only $100,000 - less than some others it found with a similar violation - because the company took "prompt remedial steps" to assess harm to clients and reimburse them.

 

[Rich_by_the_Bay]

NML always prided itself as the paragon of integrity. This is sad.

I understand they are still a good insurance company, but as far as investments go, maybe not quite as respectable.

When I was in Wi I recall they acquired the Robert Baird investment house. What ever became of that?

 

[FinanceDude]

NML always prided itself as the paragon of integrity. This is sad.

I understand they are still a good insurance company, but as far as investments go, maybe not quite as respectable.

When I was in Wi I recall they acquired the Robert Baird investment house. What ever became of that?

Baird did an ESOP and bought their way out about 2 years ago..........

NML reps aren't adequately trained in investments so therein lied one big problem............along with the lively performance of Mason Street Funds..........

 

[REWahoo]

It's a shame that large companies are levied fines in such small amounts that they have no real impact to the bottom line. A $100K hit for MNL doesn't even qualify as background noise when you look at their financials.

Maybe the NASD could get the attention of these miscreants by including with the pittance fine the requirement the company place $25M or so in escrow with a third party. The money would be returned over a 5 year period only if the company could prove they kept their nose clean, otherwise it would be retained as a fine.

And during the 5 year period, interest earned on the escrowed funds would be used to pay for medical care for the children of illegal immigrants.

 

[FinanceDude]

It's a shame that large companies are levied fines in such small amounts that they have no real impact to the bottom line. A $100K hit for MNL doesn't even qualify as background noise when you look at their financials.

Maybe the NASD could get the attention of these miscreants by including with the pittance fine the requirement the company place $25M or so in escrow with a third party. The money would be returned over a 5 year period only if the company could prove they kept their nose clean, otherwise it would be retained as a fine.

And during the 5 year period, interest earned on the escrowed funds would be used to pay for medical care for the children of illegal immigrants.

NML's has about $150 BILLION in assets, and has over $1 TRILLION in life coverage in force, so I agree that $100,000 isn't a big deal...........