Securities regulators in New Hampshire have accused units of ING Groep NV of taking fees from poorly performing mutual funds that were sold in state retirement plans. They also accuse ING of market timing (rapid trading) in some of the funds, and this harmed some state employees. The regulators are seeking a revocation of ING’s broker-dealer license, a finding of fraud, and an order of restitution.

ING supposedly participated in “revenue sharing” whereby the company receives money to promote certain funds, but they didn’t notify customers. The company allegedly received millions of dollars between 2001 and 2004 under this arrangement. While the state was led to believe that ING put funds on the plan’s investment menu based upon performance, the company was really making them available based upon their revenue sharing agreement.

Investigators in New York are looking at an arrangement between ING and the New York State United Teachers Union, in which ING pays the union $3 million per year for the right to market its products to union members.