SEC Charges Life Insurance Company with Pricing Violations Relating to Redemption Orders from Investment Companies

The SEC charged Nationwide Life Insurance Company ("Nationwide") with violating pricing rules routinely in its daily processing of purchase and redemption orders for variable insurance contracts and underlying mutual funds.

An SEC investigation found that in spite of receiving customer orders and other variable contract mail in its P.O. boxes at least several hours before the 4:00 p.m. cut-off time, Nationwide sought to dodge its requirement to use the current day's price to process the orders by ensuring that this mail wasn't delivered to its offices until after 4:00 p.m.

The SEC's order found that Nationwide instructed the post office to separate mail directed to the P.O. box for its variable contract business from mail directed to P.O. boxes for other lines of business, and to maintain it in different areas of the post office loading dock.

At one point, "Nationwide requested a meeting with the Post Office" to stress "that it needed 'late delivery' of . . . mail."

See: SEC Press Release; SEC Order.