Another IRA Administrator Found to Be Operating as Unregistered Broker-

Bankers Pension Services Inc. agreed last week to abide by a cease-and- desist order imposed by the Securities and Exchange Commission for operating as an unregistered broker-dealer.

"We didn't find any fraud," said Lisa A. Gok, assistant director in the SEC's Los Angeles office. "But they were doing certain things that made them a broker-dealer."

The action against the Tustin, Calif.-based company is the agency's latest attempt to supervise the independent administrators that many banks rely on to keep the books for billions of dollars in individual retirement accounts and pension plans.

According to the SEC, Bankers Pension Services acted as a broker-dealer by commingling interest-bearing customer accounts, maintaining power of attorney over customer funds, and charging transaction fees to open certain kinds of accounts.

Because its actions were not regulated, the company had "the ability to commit fraud and not be found out for a while," Ms. Gok said.

Bankers Pension Services administers more than $400 million in self- directed IRAs and pension plans, according to SEC documents.

The firm neither admitted nor denied wrongdoing. Under the SEC order, it will have to leave the business, register as a broker-dealer, or affiliate with a registered broker-dealer or an exempt institution such as a bank.

In a prepared statement Bankers Pension Services said the agreement with the SEC "addresses some industry changes and has no impact on clients." Its executives did not return calls for comment.

In June, the SEC took a similar action against one of the Tustin firm's competitors, Transcorp Pension Services. The Irvine, Calif., company had $700 million in assets under administration.

At that time, Bankers Pension Services chairman Ronald L. Thon said "there will be another layer of regulation on an already heavily regulated industry. How many government agencies need to be involved .. ?"

In the wake of the recent SEC enforcement actions, bankers would do well to make sure their pension bookkeepers are up to snuff, one expert said.

The SEC action serves as "a prudent warning to banks to check with their pension service administrators to make sure they're registered," said F. Ronald O'Keefe, law partner at Hahn Loeser & Park, Cleveland. "It's not out of the question that if something happened that's egregious, that a bank could get named in a lawsuit."

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