We all have to learn to be more pro-active if we expect to identify investment fraudsters like The Principal Group of Companies. This rodeo with Principal will be soon coming to an end… we have wrapped up the barrel racing, calf roping and bronc riding, and now we are at the grand finale…. Bull riding! A good bull rider has to learn the rules first, or he just keep getting bucked off, and maybe trampled in the process. The same is true for investing… to be proactive and due diligent at the same time, you start with the rules… in this case, The State of Iowa Chapter 508a, that tells Principal what they can, and cannot do with your money. Sounds pretty basic, and it is, really, but there are twists and turns to maneuver, much like riding a bull… first, the “rules:”
I published the complete Chapter in case you wanted to read the entire regulation…. I will discuss only the areas highlighted in yellow, since those areas define what Principal is supposed to be doing with your money. The first requirement states the following:
1. The income, gains and losses, realized or unrealized, from assets allocated to a separate account shall be credited to or charged against the account, without regard to other income, gains or losses of the company.
This “basic requirement” is pretty straight forward. It needs no clarification. But it looks like Principal forgot to read this Chapter, because they left off the “income” part of what the investor is entitled to keep. Principal’s “Audit Instructions ” for 2009, for 2009 for example, clearly state that “Participating plans DO NOT “share” in the realized gains of the investment.” think about that statement… because they are talking about the income and realized gains…. and we are talking about BILLIONS of dollars in shortfalls for millions of investors! Principal describes their process as follows:
Iowa “law” clearly states the opposite… the income and realized gains belong to the investors, NOT Principal. By ignoring this portion of Iowa’s regulations, Principal has stolen billions of dollars from investors…The market value (as determined by Principal management) bears no relationship to realized gains and losses. An office building can generate $100 million in net earnings each year. The market value may be $300 million this year, and $250 million next year, but the net earnings represent the cash flow, the net income from operations. If you invest in the Principal U.S. Separate Account, Principal steals the cash, while YOU may lose money on the market value. Principal is breaking the law, cheating investors out of billions of dollars every year from the earned income from those investments. But the State of Iowa need not worry about an enforcement action. During the first 6 months of 2013, Principal earned only $11 in net gains from operations on their multiple billion dollar commercial property separate account, which was actually an increase of $217 from the entire year of 2012… so not to worry! It is UNBELIEVABLE that our regulators stick their heads in the sand while Principal defrauded millions of investors each year!!
What idiot, sitting behind his desk and calling himself the Iowa Insurance Commissioner, believes these lies? Where is the Des Moines Register when you need them. Why are not Principal clients boycotting Principal and demanding answers? We have discussed approximately 30 words of the Iowa regulatory provisions “protecting” the public and already have uncovered billions of dollars Principal has stolen from investors since 1982…. with more to come….