SUPPLEMENT DATED JUNE 28, 2006
TO THE CURRENT PROSPECTUSES OF
ING CORPORATE LEADERS TRUST, ING EQUITY TRUST, ING FUNDS
TRUST, ING INVESTMENT FUNDS, INC., ING INVESTORS TRUST (TO
ONLY ING AMERICAN FUNDS PORTFOLIOS, ING LIFESTYLE PORTFOLIOS,
ING MARKETPRO PORTFOLIO, ING MARKETSTYLE PORTFOLIOS, ING
DISCIPLINED SMALL CAP VALUE PORTFOLIO, ING EQUITIESPLUS PORTFOLIO,
ING GLOBAL REAL ESTATE PORTFOLIO AND ING VP INDEX PLUS INTERNATIONAL
EQUITY PORTFOLIO), ING MAYFLOWER TRUST, ING MUTUAL FUNDS, ING PRIME
RATE TRUST, ING SENIOR INCOME FUND, ING VARIABLE INSURANCE TRUST,
ING VARIABLE PRODUCTS TRUST, AND ING VP NATURAL RESOURCES TRUST
(THE "REGISTRANTS")
The Prospectuses for the Registrants are hereby supplemented with the
following information relating to "Information Regarding Trading of ING's
U.S. Mutual Funds."
INFORMATION REGARDING TRADING OF ING'S U.S. MUTUAL FUNDS
As discussed in earlier supplements, ING Investments, LLC ("Investments"),
the adviser to the ING Funds, has reported to the Boards of
Directors/Trustees (the "Boards") of the ING Funds that, like many U.S.
financial services companies, Investments and certain of its U.S. affiliates
have received informal and formal requests for information since September
2003 from various governmental and self-regulatory agencies in connection
with investigations related to mutual funds and variable insurance products.
Investments has advised the Boards that it and its affiliates have cooperated
fully with each request.
In addition to responding to regulatory and governmental requests,
Investments reported that management of U.S. affiliates of ING Groep N.V.,
including Investments (collectively, "ING"), on their own initiative, have
conducted, through independent special counsel and a national accounting
firm, an extensive internal review of trading in ING insurance, retirement,
and mutual fund products. The goal of this review was to identify any
instances of inappropriate trading in those products by third parties or by
ING investment professionals and other ING personnel. ING's internal review
related to mutual fund trading is now substantially completed. ING has
reported that, of the millions of customer relationships that ING maintains,
the internal review identified several isolated arrangements allowing third
parties to engage in frequent trading of mutual funds within ING's variable
insurance and mutual fund products, and identified other circumstances where
frequent trading occurred, despite measures taken by ING intended to combat
market timing. ING further reported that each of these arrangements has been
terminated and fully disclosed to regulators. The results of the internal
review were also reported to the independent members of the Boards.
Investments has advised the Boards that most of the identified arrangements
were initiated prior to ING's acquisition of the businesses in question in
the U.S. Investments further reported that the companies in question did not
receive special benefits in return for any of these arrangements, which have
all been terminated.
Based on the internal review, Investments has advised the Boards that the
identified arrangements do not represent a systemic problem in any of the
companies that were involved.
In September 2005, ING Funds Distributor, LLC ("IFD"), the distributor of
certain ING Funds, settled an administrative proceeding with the NASD
regarding three arrangements, dating from 1995, 1996 and 1998, under which
the administrator to the then-Pilgrim Funds, which subsequently became part
of the ING Funds, entered into formal and informal arrangements that
permitted frequent trading. Under the terms of the Letter of Acceptance,
Waiver and Consent ("AWC") with the NASD, under which IFD neither admitted
nor denied the allegations or findings, IFD consented to the following
sanctions: (i) a censure; (ii) a fine of $1.5 million; (iii) restitution of
approximately $1.44 million to certain ING Funds for losses attributable to
excessive trading described in the AWC; and (iv) agreement to make
certification to NASD regarding the review and establishment of certain
procedures.
In addition to the arrangements discussed above, Investments reported to the
Boards that, at this time, these instances include the following, in addition
to the arrangements subject to the AWC discussed above:
- Aeltus Investment Management, Inc. (a predecessor entity to ING Investment
Management Co.) identified two investment professionals who engaged in
extensive frequent trading in certain ING Funds. One was subsequently
terminated for cause and incurred substantial financial penalties in
connection with this conduct and the second has been disciplined.
- ReliaStar Life Insurance Company ("ReliaStar") entered into agreements
seven years ago permitting the owner of policies issued by the insurer to
engage in frequent trading and to submit orders until 4pm Central Time. In
2001 ReliaStar also entered into a selling agreement with a broker-dealer
that engaged in frequent trading. Employees of ING affiliates were
terminated and/or disciplined in connection with these matters.
- In 1998, Golden American Life Insurance Company entered into arrangements
permitting a broker-dealer to frequently trade up to certain specific limits
in a fund available in an ING variable annuity product. No employee
responsible for this arrangement remains at the company.
For additional information regarding these matters, you may consult the Form
8-K and Form 8-K/A for each of four life insurance companies, ING USA Annuity
and Life Insurance Company, ING Life Insurance and Annuity Company, ING
Insurance Company of America, and ReliaStar Life Insurance Company of New
York, each filed with the Securities and Exchange Commission (the "SEC") on
October 29, 2004 and September 8, 2004. These Forms 8-K and Forms 8-K/A can
be accessed through the SEC's Web site at http://www.sec.gov. Despite the
extensive internal review conducted through independent special counsel and a
national accounting firm, there can be no assurance that the instances of
inappropriate trading reported to the Boards are the only instances of such
trading respecting the ING Funds.
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Investments reported to the Boards that ING is committed to conducting its
business with the highest standards of ethical conduct with zero tolerance
for noncompliance. Accordingly, Investments advised the Boards that ING
management was disappointed that its voluntary internal review identified
these situations. Viewed in the context of the breadth and magnitude of its
U.S. business as a whole, ING management does not believe that ING's acquired
companies had systemic ethical or compliance issues in these areas.
Nonetheless, Investments reported that given ING's refusal to tolerate any
lapses, it has taken the steps noted below, and will continue to seek
opportunities to further strengthen the internal controls of its affiliates.
- ING has agreed with the ING Funds to indemnify and hold harmless the ING
Funds from all damages resulting from wrongful conduct by ING or its
employees or from ING's internal investigation, any investigations conducted
by any governmental or self-regulatory agencies, litigation or other formal
proceedings, including any proceedings by the SEC. Investments reported to
the Boards that ING management believes that the total amount of any
indemnification obligations will not be material to ING or its U.S. business.
- ING updated its Code of Conduct for employees reinforcing its employees'
obligation to conduct personal trading activity consistent with the law,
disclosed limits, and other requirements.
- The ING Funds, upon a recommendation from ING, updated their respective
Codes of Ethics applicable to investment professionals with ING entities and
certain other fund personnel, requiring such personnel to pre-clear any
purchases or sales of ING Funds that are not systematic in nature (i.e.,
dividend reinvestment), and imposing minimum holding periods for shares of
ING Funds.
- ING instituted excessive trading policies for all customers in its
variable insurance and retirement products and for shareholders of the ING
Funds sold to the public through financial intermediaries. ING does not make
exceptions to these policies.
- ING reorganized and expanded its U.S. Compliance Department, and created
an Enterprise Compliance team to enhance controls and consistency in
regulatory compliance.
OTHER REGULATORY MATTERS.
The New York Attorney General and other federal and state regulators are also
conducting broad inquiries and investigations involving the insurance
industry. These initiatives currently focus on, among other things,
compensation and other sales incentives; potential conflicts of interest;
potential anti-competitive activity; reinsurance; marketing practices
(including suitability); specific product types (including group annuities
and indexed annuities); fund selection for investment products and brokerage
sales; and disclosure. It is likely that the scope of these industry
investigations will further broaden before they conclude. ING has received
formal and informal requests in connection with such investigations, and is
cooperating fully with each request. In connection with one such
investigation, affiliates of Investments have been named in a petition for
relief and cease and desist order filed by the New Hampshire Bureau of
Securities Regulation concerning ING's
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administration of the New Hampshire state employees deferred compensation
plan. ING is cooperating with this regulator to resolve the matter. Other
federal and state regulators could initiate similar actions in this or other
areas of ING's businesses.
These regulatory initiatives may result in new legislation and regulation
that could significantly affect the financial services industry, including
businesses in which ING is engaged.
In light of these and other developments, ING continuously reviews whether
modifications to its business practices are appropriate.
At this time, in light of the current regulatory factors, ING U.S. is actively
engaged in reviewing whether any modifications in our practices are appropriate
for the future.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares, or other adverse consequences to ING Funds.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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