Aetna Life & Casualty Co. last week agreed to pay $5.2 million in restitution and fines to settle charges that the company improperly marketed investment products to public employee retirement systems.
The settlement includes $3.7 million in payments to 21 public pension funds in Massachusetts and one in Rhode Island. Aetna has previously paid $9.5 million in private settlements with the funds to try to end a scandal allegedly involving $1.8 million the company made in secret payments to pension fund advisers.
Federal and state officials have charged that the advisers. in exchange for the payments, told their pension fund clients to invest money with two Aetna subsidiaries, Aetna Capital Management Inc. and Aetna Financial Services Inc.
As part of the settlement, Aetna agreed to cooperate with ongoing investigations by the Securities and Exchange Commission, the U.S. attorney's office for the district of Massachusetts, and Massachusetts' secretary of state and attorney general.
The various investigations found that Aetna received a total of $7.4 million in revenues between 1982 and 1991 from the 22 retirement systems, which invested more than $230 million in stocks and other Aetna products. The company has paid a total of $14.7 million in fines and restitution.
In a statement, Aetna called the case " an isolated matter, " and said the performance of its clients' underlying investments was not affected. "The company has taken strong steps to protect against recurrence of the problem," the statement says.