AXA Advisors LLC Fined for Reportedly Misrepresenting Junk Bonds
According to the Financial Industry Regulatory Authority (FINRA), the broker-dealer unit of AXA Equitable Life Insurance Co. agreed to pay a $600,000 fine and repay $172,000 to 401(k) retirement plan participants for marketing some junk bond funds as investment-grade.
AXA Advisors LLC reportedly misrepresented the credit quality of certain funds offered within group annuity contracts for the corporate retirement plans, for five years ending in November 2015, according to a Letter of Acceptance, Waiver and Consent signed by the AXA.
The firm, which also agreed to send affected plan participants corrective disclosures, and agreed to the settlement without admitting or denying the facts, according to the AWC.
Further, the AWC alleges that the mischaracterization of junk bond funds occurred in thousands of enrollment forms, investment option attachments and other documents created by the broker-dealer’s life insurance company affiliate. Approximately 800 retirement plans and 6,200 plan participants were affected, according to FINRA.
AXA reportedly violated three rules regarding supervisory procedures, advertising and negligent misrepresentation.
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