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FINRA Fines Prudential $1M for Wrong Info on Fees in Retirement Plans

Wednesday, January 29, 2020

Mark this in the category of “one more reason to have affective advertising compliance software.” Prudential Investment Management Services, LLC was recently fined for violating multiple FINRA rules from 2010 to 2017, to include NASD/FINRA Rule 2210 regarding accuracy in advertising. According to the signed letter of agreement, Prudential’s violations included: 

  • Inaccurate expense ratios and performance data for investments in defined contribution plans.
  • Inaccurate third-party ratings for investment options in retirement plan Group VAs. 
  • Providing performance data for money market funds as investment options in retirement plans, but failing to provide ‘Seven-Day Yield’ information as required by the SEC’s Rule 482(e) under the Securities Act of 1933
  • Inaccurate historical performance information in almost 60% of their fund fact sheets. 

Without admitting or denying the findings, Prudential consented to the fine and is cooperating with FINRA to include implementing various requested initiatives designed to make the company compliant with FINRA rules.

Let the Software Work for You

Providing accurate historical performance information and fees to the public is a requirement of FINRA Rule 2210. Understandably, with all the fact sheets, statements, and sales literature provided to retail clients this can prove to be very difficult. Firms need software that tracks every piece of information, all historical data, performance data, etc. in order to be sure that mistakes like this do not happen for large periods of time. These software solutions also make it easier for firms to track where the data came from so they can correct it going forward. They also make it easier to provide all necessary information to the regulators quickly and thoroughly.

Red Oak is the advertising review software of choice in the financial services industry, with clients having over $19 trillion in assets under management. Partners of Red Oak benefit from quick implementation timelines, agile technology that responds to your needs and is 100% Books and Records compliant, all resulting in 35% faster approvals, and 70% fewer touches. Are you ready to minimize risk, relieve the regulatory burden, and improve efficiency?  Contact the Red Oak team to learn how. 

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes. 

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