NY Life Cooperating With Inquiry
NEW YORK (AP) _ New York Life Insurance said Thursday that it is ``fully cooperating″ with an investigation into an alleged kickback scheme involving one of the company’s bond traders.
The trader, 27-year-old Anthony Shen, is believed to have accepted cash and gifts in exchange for steering portions of New York Life’s lucrative bond trading business to a handful of trading firms.
Moreover, Shen reportedly accepted kickbacks to allow at least one firm to purposely overcharge New York Life for completing bond trades. The firm then allegedly collected higher commissions for the more expensive trades.
``As a victim of this scheme, New York Life is fully cooperating with with regulatory and law enforcement authorities,″ said a company spokeswoman.
New York Life is the nation’s fifth-largest life insurance company.
The Wall Street Journal reported on Thursday that the Manhattan U.S. attorney’s office and the Securities and Exchange Commission have begun separate investigations into the charges.
Spokesmen for the U.S. attorney’s office and the SEC, citing agency policies against commenting on ongoing cases, wouldn’t confirm or deny that investigations were under way.
The Journal reported that Shen has been fired by New York Life and that his alleged kickback schemes may have cost the company $15 million in unnecessary commissions.
Shen couldn’t be reached for comment Thursday. But his lawyer told the Journal that Shen has denied the charges and that he voluntarily left New York Life.
Some of the trading firms believed to be part of the investigation are PaineWebbber Group Inc., Nomura Securities International, Greenwich Capital Markets and Sun Coast Capital, a small Fort Lauderdale, Fla.-based firm.
The law enforcement investigation is believed to be focusing on the value of the cash and gifts allegedly given to Shen.
The SEC is trying to determine the extent to which officials at the trading firms were aware that New York Life was being overcharged for its bond trades, the Journal said.