Deals & People April 22, 2013

FINRA Appoints Regulatory Operations EVP

Susan Axelrod will become executive vice president of regulatory operations at the Financial Industry Regulatory Authority (FINRA).
Reported by

Axelrod will oversee enforcement, the office of fraud detection and market intelligence, and member regulation (sales practice, risk oversight and operational regulation and shared services). Axelrod previously was the head of FINRA’s member regulation sales practice area. Mike Rufino, chief operating officer of member regulation – sales practice, will assume the role of acting head of the sales practice group.

Axelrod brings deep and wide-ranging knowledge of securities regulation to her new position. Before becoming head of member regulation sales practice, Axelrod was senior vice president and deputy of regulatory operations, where she assisted in the oversight of market regulation, enforcement and member regulation. Before joining FINRA in 2007, Axelrod was chief of staff to the chief executive of New York Stock Exchange regulation. She began her career at NYSE in 1989 as a staff attorney in the division of enforcement and became an enforcement director in 1997.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Axelrod holds a bachelor’s degree from Emory University and a law degree from the School of Law at Hofstra University.

Axelrod will report to Richard Ketchum, FINRA’s chairman and chief executive.

Compliance April 22, 2013

Fidelity Accused of Self-Dealing in New Lawsuit

A lawsuit filed against Fidelity (FMR) accuses it of self-dealing at the expense of its own workers’ retirement savings.
Reported by

The complaint brought by an FMR LLC Profit Sharing Plan participant on behalf of all participants says the history of the plan’s investment offerings demonstrates rampant conflicts of interest. “FMR’s self-interest is the only plausible explanation for the plan’s one hundred percent proprietary fund investment array,” the lawsuit states.  

The suit claims the proliferation of Fidelity funds in the plan caused the plan and participants to incur unusually high expenses, to the benefit of FMR. It also says the defendants maintained the plan’s investment in high-fee Fidelity target-date funds (TDFs) when FMR affiliates offered lower-fee and better-performing TDFs.  

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

According to the complaint, the pattern of adding new Fidelity funds to the plan demonstrates severe conflicts of interest.  

The case seeks a declaration that the defendants breached their fiduciary duty of loyalty under the Employee Retirement Income Security Act (ERISA); a declaration that the defendants violated ERISA § 406 and participated in prohibited transactions; an order compelling the disgorgement of all investment advisory fees paid and incurred, directly or indirectly, to FMR subsidiaries and affiliates by the plan, including disgorgement of profits thereon;an order compelling the defendants to restore all losses to the plan arising from their violations of ERISA;an order granting equitable restitution and other appropriate equitable monetary relief against defendants; and such other equitable or remedial relief as may be appropriate.  

The complaint in Bilewicz v. FMR LLC is here.

«