MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
|
|
MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Monday, September 18, 2006 Fired ING Wholesaler Heads to NASD Hearing The case of a mutual fund wholesaler who blew the whistle on sales practices at ING Funds is heading to a NASD arbitration panel today. It is also getting play in the Wall Street Journal. The arbitration was brought by Stuart Fromm and names five ING executives -- including former ING Funds CEO Robert Boulware -- as targets. Fromm, who claimed he was ING's top salesman, is seeking $10 million plus in compensation and damages. The case is believed to be the first brought under the whistle-blower protection provisions of the Sarbanes-Oxley law. Also named in the suit along with ING Funds Distributor LLC and Boulware are principals Bayard Closser, Lauren Bensinger, John Heilner and Richard Jiminez. Fromm claims that he was terminated as a wholesaler covering New York for Phoenix-based ING Funds after he raised questions about activities that he believed were in violation of NASD rules. The specifics of the case include allegations that the executives violated of the Sarbanes-Oxley Act of 2002; defamed him through libel and slander; failed to pay wages in violation of the New York Labor Law; and breached his employment contract. His claim includes lost wages of between $400,000 to $500,000 a year and compensation for other benefits, including pension earnings and deferred compensation. He is also seeking reinstatement at the fund firm. Fromm, 49, joined ING in 2000 and was fired in July 2004. "I was a senior vice president with ING Funds Distributor, I was their No. 1 salesman, period," Fromm stated. "During 2004, there were two areas of compliance that I questioned -- the way they conducted themselves internally and the way they represented themselves to the public with their funds and the way in which their funds were sold. I questioned those instances and then in July 2004, as the No. 1 or No. 2 salesman at the time, I was abruptly fired." In the complaint, Fromm alleges that ING Funds improperly offered rewards for sales of funds at a client conference held at the Deer Valley Resort in Park City, Utah in 2004. He also alleges that ING Funds misled potential investors by claiming that its ING Foreign Fund was similar to Julius Baer's International Equity Fund. Julius Baer subadvises the ING Fund. Printed from: MFWire.com/story.asp?s=12803 Copyright 2006, InvestmentWires, Inc. All Rights Reserved |