STOCKHOLM, Sweden, June 17, 2005 (PRIMEZONE) -- As previously communicated, most recently in Skandia's 2004 Annual Report, in connection with investigations by the US Securities and Exchange Commission (SEC) and the New York Attorney General's office, several mutual fund and variable annuity assurance companies in the US have been accused of allowing frequent trading, or "market timing", in fund units, which may be harmful to the interests of other investors. Skandia's former subsidiary American Skandia has been subject to such investigations.
Skandia has approved American Skandia's offer of USD 95 million to settle the market timing investigation being conducted by the Staff of the Securities and Exchange Commission and the New York Attorney General's Office. The proposed settlement would fully resolve the previously disclosed investigations by the SEC and the New York Attorney General's Office into market timing by certain investors in American Skandia funds.
American Skandia will neither admit nor deny any liability, but has offered to resolve the matter by paying restitution and a civil penalty of approximately USD 95 million in the aggregate. The ultimate financial responsibility for this matter and hence the USD 95 million payment is set forth in Skandia's indemnity obligations in the 19 December 2002 agreement for the acquisition of shares in American Skandia from Skandia by Prudential Financial.
The proposed settlement agreement is subject to the drafting of settlement papers and approval by the Commission of the SEC.
In a comment on the settlement, Bjorn Bjornsson, Vice Chairman of Skandia, says:
"It is good for Skandia that the prolonged discussions with the US authorities are now hopefully concluded and that Skandia can leave behind the issue of market timing."
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