Compliance July 25, 2008

Bogus Hardship Withdrawals Leads to Conviction

A woman accused of persuading Chrysler auto workers to take bogus hardship withdrawals from their 401(k) accounts has been convicted, the Associated Press reported.
Reported by

Prosecutors accused Mary Kennedy Howard of filing hardship requests totaling about $600,000 for purchases of houses that did not exist. Howard took a 10% fee from the hardships.

Howard filed 46 401(k) withdrawal requests from 1998 to 2002, mostly for people who worked at Chrysler LLC’s Warren Stamping Plant, the AP said.

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According to prosecutors, the 64-year-old woman turned down an attractive plea deal before the trial. She was convicted of mail fraud on Wednesday.

Howard will be sentenced on October 30.

Deals & People July 25, 2008

AllianceBernstein Manager for Vanguard Growth Offerings Replaced

Vanguard appointed new portfolio managers to the AllianceBernstein L.P. portions of the $4.8 billion Vanguard U.S. Growth Fund and the $314 million Growth Portfolio of the Vanguard Variable Insurance Fund.
Reported by

AllianceBernstein Executive Vice President James G. Reilly and Senior Vice President P. Scott Wallace assumed portfolio management responsibilities for AllianceBernstein’s portion of the funds. They replace former manager and Senior Vice President Alan E. Levi who is transitioning toward retirement, an announcement said.

Reilly joined AllianceBernstein in 1985. He has served on the firm’s large-cap growth team since 1988, and was named the head of the team in 2003. He was appointed executive vice president in 1999.

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Wallace joined AllianceBernstein in 2001 as a senior vice president, and has been a member of the large-cap growth team since arriving at the firm.

AllianceBernstein has advised the funds since 2001 and manages approximately two-thirds of the funds’ assets.

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