WASHINGTON — Clients of Gordon B. Grigg and his firm ProTrust Management Inc. were allegedly defrauded out of $6.5 million through a bogus claim that their money would be invested in the federal government's Troubled Asset Relief Program and other securities that do not exist.On Jan. 28, the SEC alleged that Grigg obtained control over funds of at least 27 clients since 2007 and falsely claimed to have invested their money in securities described as "private placements." Grigg created fraudulent account statements reflecting his clients' ownership of these nonexistent securities, the SEC said. He also began falsely claiming in December that ProTrust had the ability to invest client funds in government-guaranteed commercial paper and bank debt as part of the TARP program. Grigg also falsely claimed to have partnerships and other business relationships with several of the nation's top investment firms.Katherine Addleman, regional director of the SEC's Atlanta regional office, said "Grigg and ProTrust preyed upon investors' desire for safety by claiming associations with reputable investment firms and the government's TARP program. In this case, not only were such claims false, but there is in fact no program in which investors can buy debt guaranteed by the TARP program."After the SEC's complaint was filed, Grigg and ProTrust consented to the emergency relief sought by the SEC, and Judge William J. Haynes Jr. of U.S. District Judge for the Middle District of Tennessee issued a temporary restraining order to prevent the defendants from further violations and freezing their assets.–[email protected]

Hardship Withdrawals Rise While401(k) Contributions Hold Steady

BOSTON — Fidelity Investments has noticed a slight increase in hardship withdrawals from 401(k) plans even as account holders are staying the course with regular contributions.The findings are based on analysis of Fidelity's 17,095 corporate 401(k) plans representing more than 11 million participants. While employees continued to contribute to their 401(k) plans, the average workplace savings account balance dropped 27% in 2008 to $50,200 from $69,200 in 2007, according to Fidelity. The company also found that in 2008 participants contributed an average of $5,600 (pretax earnings) to their 401(k) accounts, slightly higher than 2007 levels.Meanwhile, fewer employees initiated a 401(k) loan in 2008 (9.0%) when compared to 2007 (9.7%). The average loan amount was $8,400. Hardship withdrawals, which are generally only allowed for immediate emergency reasons, continue to trend up at 1.8% in 2008 compared to 1.6% in 2007, Fidelity found. The average hardship withdrawal amount decreased slightly in 2008 to $6,000.The portion of participants making an exchange to their 401(k) account-shifting money from one investment option to another-was 13.9 % in 2008, a slightdecline from the 2007 level of 14.2%. Exchange activity was the heaviest forparticipants with the largest account balances, with more than 37% ofparticipants with $250,000 or more making one or more exchanges during theyear. About 10% of participants with balances from $5,000 to $10,000 made an exchange in 2008.–[email protected]