SEC Fines Regions Bank $1M for Role in Fraud

     (CN) – The Securities and Exchange Commission fined Regions Bank $1 million for its participation in an investment scam that illicitly raised $255 million through “exorbitant, undisclosed commissions and fees” from 14,000 investors, mostly from Latin America.



     The SEC announced Monday on its Web site that Regions had agreed to the $1 million fine. The agreement was reached on the same day the SEC filed suit against the bank in Miami Federal Court.
     In its complaint, the SEC says Regions Bank and its predecessor, Union Planters Bank, served as trustee of investment plans since October 2001.
     The SEC says defendants gave investors a choice of making either annual contributions or a single, lump-sum contribution. But U.S. Pension Trust did not disclose to investors that it subtracted “substantial amounts” of commissions and other fees, the SEC says.
     The company then took up to 85 percent of initial contributions for those who paid annually, and as much as 18 percent for single-contribution plans.
     Regions Bank failed to disclose the amounts taken out for fees and commissions, the SEC claimed in its lawsuit.
     The SEC says Regions Bank allowed U.S. Pension Trust to use its name in marketing materials, created a promotional video on its Web site, and sent workers to Latin America to meet with prospective investors.
     “Regions Bank provided a false air of legitimacy to this scheme,” Glenn Gordon, associate director of the SEC’s Miami office, said in a release. “Regions Bank was aware or should have been aware of (U.S. Pension Trust’s) deceptive sales practices, yet agreed to participate in these investment plans.”

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