Thursday, July 13, 2006

Sun Life Unit to Pay U$3.8 Mln to Settle SEC Sales Allegations

  
Bloomberg, 13 July 2006

A U.S. brokerage unit of Sun Life Financial Inc., Canada's second-largest life insurer, agreed to pay $3.8 million to settle claims it failed to adequately tell customers how it was paid to sell investment products.

IFMG Securities sold mutual funds and variable annuities for as many as 17 companies through a ``preferred'' program, the U.S. Securities and Exchange Commission said in a statement today. The broker didn't properly inform clients those companies paid for special treatment and that its brokers received larger commissions for selling their products, the SEC said.

IFMG Securities didn't adequately disclose ``the potential conflicts of interest created by these payments,'' the SEC said in the statement.

Purchase, New York-based IFMG Securities, which proposed the settlement, neither admitted nor denied the claims.

The broker agreed to pay more than $2.8 million to cover improper gains and interest, as well as civil penalties of $1 million, the SEC said. Since 2003, the SEC and other regulators have imposed $400 million in penalties on brokers and fund firms for improper sales practices, including the failure to tell investors about so-called revenue sharing payments.

``We are pleased to bring this matter to a final resolution, and will continue to work to enhance our compliance practices and procedures so that they meet the highest possible standards,'' Michael Weiss, president of IFMG Securities, said in an e-mailed statement.
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