Dale Earnhardt, Jr. says in a Nationwide commercial that one of the reasons that the Earnhardt family has trusted Nationwide for more than 30 years is because "...as a mutual, Nationwide doesn't report to Wall Street…" While this is surely true (in fact, no person or company anywhere in the world reports to Wall Street), Nationwide did just pay an $8 million fine to the Securities and Exchange Commission ("SEC"), which is the federal agency that oversees participants in the securities world, including securities exchanges, securities brokers and dealers, investment advisors, and mutual funds. Nationwide paid the $8 million fine because, according to the SEC's press release dated May 14, 2015, for 15 years (i.e., half of the length of time that the Earnhardt family trusted Nationwide), Nationwide routinely violated "pricing rules in its daily processing of purchase and redemption orders for variable insurance contracts and underlying mutual funds." According to the SEC statement, Nationwide's prospectuses stated that orders received by 4 p.m. at its home office would receive that day's price, while orders received after 4 p.m. would receive the next day's price. The problem that the SEC found was that Nationwide intentionally delayed the retrieval of mail so that it could apply the next day's price to customer orders (as if the customers' orders were received too late in the day to qualify for that day's prices). The SEC's investigation found that Nationwide did a number of things to ensure late delivery of these orders, including: (1) having the post office separate its variable contracts business mail (to which these orders relate) from mail relating to Nationwide's other business so that couriers could be sent early in the morning to pick up mail relating to other business and then come back later in the day to pick up the mail that related to orders for the variable contracts business; (2) instructing couriers carrying variable contracts business mail who arrived before 4 p.m. to wait in until 4:01 p.m. before entering Nationwide's building; and (3) complaining to the post office when its variable contracts business mail was mixed with mail relating to other business (including requesting a meeting with the post office to stress "that it needed 'late delivery' of variable contract mail 'due to regulations that require Nationwide to process any mail received by 4 p.m. the same day' ").
To close the loop on the racing connection, a few things come to mind, including Ricky Bobby's estranged father's admonition in Talladega Nights that "If you're not first, you're last." Of course, with Nationwide's practice, if you were an order that came in first before 4 p.m., you might as well still have been last because you would be treated as coming in after 4 p.m. There is also the phrase "second is first loser", but here, first would be the first loser, if it was an order that came in before 4 p.m. There is also a phrase in racing that "in order to finish first, you first must finish." At least it appears that Nationwide has finished with the dilatory practice, as according to the SEC statement, Nationwide must cease and desist from the violations of the rule.
It should be noted that Nationwide did not admit that it did anything wrong, but it did consent to the entry of an order finding that it willfully violated Rule 22c-1 under the Investment Company Act of 1940. Such a non-admission and consent seems about as straightforward as saying that one will honor orders received in the mail by 4 p.m., but then do everything in one's power to ensure that no mail is received by 4 p.m. There's another saying in racing that "It ain't cheatin' if you don't get caught".