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Insurance
giant Clico and the Securities and Exchange Commission are
headed for a showdown over a new mutual fund product being
promoted by the insurer.
The SEC issued a statement yesterday calling on Clico to stop
characterising the Clico Power Fund as an energy mutual fund.
The SEC, in a statement signed by its chairman Osbourne Nurse,
also called on Clico to immediately withdraw all advertisements
that refer to the fund as an energy fund.
But in an immediate response, Clico chairman Lawrence Duprey
rejected the SEC position and threatened to do all in its
power “to vindicate its good name.”
Clico began promoting the Clico Power Fund on Thursday in
advertisements which indicate that investments can be made
directly in the energy sector.
“Everyone
can own the first mutual fund backed by billions in corporate
energy investments,” according to the print advertisements.
The SEC said it approved a prospectus for the three Clico
mutual funds in January 2002: the Power Fund, the Core Fund
and the Shield Fund.
The SEC approved supplementary prospectuses for the three
funds in March 2003 and June this year.
“In
none of the disclosures in the family of funds was there any
disclosure that indicated that investments of the Clico Power
Fund would be predominantly in the energy sector,” according
to the SEC.
Responding to the SEC statement last night, Clico chairman
Lawrence Duprey rejected the position taken by the regulatory
agency. Duprey insisted that in promoting the fund, the insurance
company used “professionally acceptable advertising terms
and techniques.”
According to the Duprey statement, Clico at no time called
the Power Fund an energy fund in its ads but said the Fund
was anchored in the group’s myriad investments.
“Our
prospectus made it abundantly clear that these funds are based
on a range of equity securities—from real estate to government
debt,” Duprey said.
Duprey expressed “deep disappointment” in the position
adopted by the SEC and said Clico “will do all in its
power to vindicate its good name and protect its clients’
investment opportunities.”
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