Compliance January 4, 2010

H&R Block to Refund IRA Fees to Settle Lawsuit

H&R Block Inc will pay as much as $20.2 million to settle a New York lawsuit accusing it of fraudulently marketing individual retirement accounts (IRAs) that charged hidden fees.
Reported by

Reuters reports that New York Attorney General Andrew Cuomo said the accord calls for the tax preparer to refund $11.4 million to $19.4 million of fees to customers nationwide who opened one of its Express IRAs. H&R Block will also pay $750,000 in fines and other costs to the state, and convert Express IRAs into new retirement accounts that do not charge fees.

Cuomo said the size of the refund depends on the number of claims made, according to Reuters.

In addition, H&R Block settled private class-action lawsuits based on the same allegations which were pending in the federal court in Kansas City, Missouri, where the company is based.

New York had accused H&R Block of steering more than 600,000 customers to Express IRAs, without disclosing hidden fees that wiped out the interest that 85% of them could earn. Eliot Spitzer, Cuomo’s predecessor, filed the lawsuit in March 2006.

Spitzer originally sought $250 million of civil penalties and other remedies. His lawsuit had said the median Express IRA account had a $323 balance, too low for investors to offset such charges as $10 annual maintenance fees, $15 set-up fees, $15 “re-contribution” fees, and $25 termination fees.

Gene King, an H&R Block spokesman, called the New York settlement “satisfactory for all parties,” according to Reuters. He had no immediate comment on the class-action settlement.

Among the defendants in the New York case was H&R Block Financial Advisors Inc, which the company sold in 2008 to Ameriprise Financial Inc. Ameriprise did not return Reuters’ call seeking comment.

The case is New York v. H&R Block Inc, New York State Supreme Court, No. 401110/2006.

Products January 4, 2010

Huntington Introduces New Emerging Markets Fund

Huntington Funds has launched a new fund to tap into emerging markets.
Reported by

The Huntington Global Select Markets Fund will offer both institutional shares (Ticker HGSIX) and A-shares (Ticker HGSAX), according to a press release.  The fund, managed by veteran portfolio manager Paul Attwood, vice president, Huntington Asset Advisors, is an addition to the Huntington Funds family of mutual funds and money market offerings.      

The fund strives to provide investors with exposure to what is believed to be the best markets across the globe. In addition to emerging markets, the fund has the flexibility to invest in equity opportunities both at home and abroad, as well as fixed-income securities and exchange-traded funds (ETFs), according to the announcement.     

“In the Huntington Global Select Markets Fund, we identify countries that are not just developing nations, but those that are exhibiting what we believe are superior characteristics in terms of fiscal responsibility and monetary policies. We also look for specific actions they are taking to capitalize on their natural resources–particularly those we feel may take precedence in the markets to come,” said Randy Bateman, president, Huntington Asset Advisors.   

Huntington Funds are part of Huntington Bancshares, a financial institution with more than a 90-year heritage of managing money. As of September 30, 2009, Huntington Asset Advisors, Inc. and its affiliates manage more than $13 billion for individuals, institutions, endowments, foundations, retirement plans, IRAs, and municipalities across a six state region, according to the firm.

More information about the fund is available at http://www.huntingtonfunds.com

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

«