The NASD has brought its first market-timing case involving variable universal life (VUL) policies. The organization has charged Jefferson Pilot Variable Corp. (JPVC) for "failing to have an adequate supervisory system in place to prevent market timing and excessive trading in the sub-accounts of its Ensemble series of VUL insurance policies."

JPVC is paying a fine of $325,000 to the NASD for this action and $238,697 in restitution to the affected funds. Furthermore, Jefferson Pilot Securities Corp. is paying a fine of $125,000 for failing to retain e-mail communications of all its registered persons; the NASD requires that broker/dealers retain such records for at least three years, but from 2001 through 2003, the company disposed of e-mail records of 217 registered persons after 60 days.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.