N.H. securities regulator earns national recognition

Mark Connolly, director of the state’s Bureau of Securities Regulation, won a national enforcement award over the weekend for his agency’s high-profile settlements with corporate giants.

“With its relatively small office, New Hampshire has been like David and Goliath of the securities regulation sector,” said Joseph Borg, president of the North American Securities Administration Association at the group’s winter enforcement conference. “And like David, these efforts have been successful.”

The award praised Connelly for three enforcement actions in particular:

• A $7.4 million settlement with American Express Financial Advisors, the largest such settlement in state history. The bureau charged American Express with pressuring agents to push its own underperforming mutual funds without proper disclosures.
• A $5 million settlement with Tyco International over the corporate board’s failure to perform its fiduciary duty in overseeing finances while former Chief Executive Officer Dennis Kozlowski and former Chief Financial Officer Mark Swartz were looting the company. Connolly also pressured the board to resign. Most of the money from that settlement was earmarked to launch the Initiative for Corporate Responsibility and Investor Protection’s investor education and corporate governance programs.
• A $2.75 million settlement with ING, a Dutch-owned firm that handles $180 million in state workers’ individual retirement plans, over charges that ING held back information on market timing activity and was pushing its own mutual funds without disclosing that those funds were sharing more revenue than ING. The settlement required ING to spell out how its fee structure work, which could affect practices in the entire retirement planning industry, according to NASAA.

He told NHBR Daily that such enforcement actions are all part of a national trend of state regulators stepping up to plate, because of cutbacks and enforcement gaps on the federal level.

“Full and meaningful disclosure for investors is necessary and investor education is critical because we have an aging population and one that is becoming increasingly dependent upon their savings,” Connolly added.

Connolly credited his 11-person staff for the recognition the bureau has received, singling out deputy directors Jeff Spill and Barry Glennon. – BOB SANDERS

Categories: News