AXA Financial Advisors was fined $600,000 and ordered to pay $172,000 in restitution by the Financial Industry Regulatory Authority. for negligently misrepresenting that certain junk bond funds held investment grade bonds. Junk bonds are deemed more risky than investment grade bonds. As such, the materials that AXA distributed misled investors about the safety of the bond funds.
Quality of Junk Bonds Were Misstated
According to FINRA, AXA distributed nearly twenty thousand inaccurate and misleading enrollment forms, investment options attachments, and other documents to plan sponsors. As a result, the credit quality of the bond funds was misstated and misclassified.
AXA to Pay Restitution for AXA Junk Bonds
FINRA has ordered AXA to send corrected disclosures and to pay restitution to the 7,000 401k and retirement plan participants for sales of the AXA junk bond funds.
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