Let’s cut the bullshit right from the start. AllianceBernstein L.P. – or AB, as they like to slickly abbreviate themselves – struts around like some pillar of the financial world, managing nearly three-quarters of a trillion dollars in assets as of this godforsaken summer of 2025. Headquartered in Nashville, with tentacles stretching across the globe, they peddle mutual funds, ETFs, and advisory services to everyday punters and fat-cat institutions alike. But here’s what’s real my friends, “AB” is a firm rotten to its core, built on a foundation of scandals that would make even the most jaded Wall Street shark stop swimming. This isn’t some abstract tale of market fluctuations; it’s a chronicle of betrayal, where the suits at AB have time and again prioritised their own pockets over the trust of the very people whose money they claim to steward. And now, with their fingers deep in the pie of companies like Cummins Inc., you have to wonder: is this just another thread in their web of ethical shortcuts?

From the mutual fund debacles of the early noughties to the fresh wounds of bondholder rip-offs in 2023, AB’s history reads like a playbook for how to screw over investors while keeping the regulators at bay with settlements and denials. They’ve paid out hundreds of millions in fines, ousted CEOs in boardroom bloodbaths, and faced lawsuits that expose a culture more interested in loopholes than loyalty. It’s infuriating, really – these pricks sit in their air-conditioned towers, raking in fees, while the little guy gets left holding the bag. And as we’ll see, their investment choices only amplify the outrage.

The Mutual Fund Fiasco: Late Trading and the Betrayal of the Little Investor

Back in 2003, when AB was still calling itself Alliance Capital Management, the wheels came off in spectacular fashion. The firm was neck-deep in the great mutual fund scandal that rocked the industry, allowing hedge funds and insiders to late-trade and market-time shares at the expense of ordinary investors. We’re talking about exploiting stale prices after the market close, pocketing gains while retail folks watched their returns erode. The SEC came down hard, slapping AB with enforcement actions that led to a whopping $250 million in settlements across the sector, including an $8 million hit specifically for their market-timing sins in 2005. Co-founder Roger Hertog, one of the original architects of this mess, was fingered for conflicts of interest that stank to high heaven, though he slithered away without charges. The fallout? Executive suspensions, a forced rebrand to AllianceBernstein, and a stain that should have ended careers. But no, these bastards just dusted themselves off and carried on, as if screwing over the public was just another quarterly report. It’s the kind of raw greed that spikes blood pressure – promising stability to widows and pensioners, then letting the sharks feast first.

Labour Rip-Offs and the Human Cost of Corner-Cutting

Fast-forward to the late noughties, and AB’s ethical lapses weren’t confined to the trading floor. In 2009, a class-action lawsuit blew open their practice of misclassifying entry-level associate portfolio managers as exempt from overtime pay, violating the Fair Labour Standards Act and New York Labour Law. These were young guns grinding long hours in the firm’s New York offices, only to be stiffed on wages for work that propped up AB’s empire. The case dragged on until 2013, culminating in a $2.98 million settlement for affected employees from 2006 to 2010. No admission of guilt, of course – just the usual corporate sleight of hand.

This wasn’t some isolated fuck-up; it spoke to a deeper rot, where AB treated its own staff like disposable cogs. Imagine toiling away analysing markets for these overlords, only to realise the firm views you as expendable. Outrageous doesn’t even cover it. It’s the shit-bowl of finance: all that talk of meritocracy, while the people get shafted.

Boardroom Bloodletting: The 2017 CEO Purge

By 2017, the chickens came home to roost in the form of a corporate coup that wouldn’t look out of place in a mafia flick. Peter S. Kraus, AB’s CEO since 2007 and pulling in a jaw-dropping $52 million in 2010 alone amid client outflows, got the boot along with nine out of eleven board directors. The puppet masters? Controlling shareholder AXA Equitable Holdings, who cited underperformance and governance failures. Kraus’s reign had been marked by asset bleeds and strategic misfires, turning AB into a cautionary tale of hubris.

Seth Bernstein stepped in as the new CEO, but the damage was done. This wasn’t just a reshuffle; it was a violent exorcism of the old guard, exposing fractures in a firm that prided itself on stability. You can’t help but feel a grim satisfaction in watching these egos deflate, but it begs the question: how many more billions were squandered before the knife fell?

Hedge Fund Hangovers and Due Diligence Disasters

AB’s appetite for distressed assets nearly bit them in 2016 with the botched acquisition of Visium Asset Management’s strategies. Visium imploded amid an insider-trading scandal, its founder hit with SEC charges, forcing the shutdown of the hedge fund. AB backed out, but not before the stink of poor due diligence clung to them. Why chase a sinking ship loaded with fraud? It reeks of desperation, a firm so hungry for growth it’d overlook red flags waving in their faces.

Then came the 2020 probes into their Energy Opportunity Funds and Securitized Asset LP by investor watchdogs like Silver Law Group. Allegations flew of unsuitable recommendations, sky-high fees, and dismal performance in private placements hawked to retail investors. No full-blown class actions materialised, but the scrutiny laid bare AB’s sales tactics: pushing complex products on folks who couldn’t afford the risk.

Modern Mayhem: From Options Scams to 401(k) Heists

The scandals didn’t stop with the past. In 2023, a lawsuit targeted AB and its affiliate Sanford C. Bernstein over the “Options Advantage” strategy – a supposed income booster using derivatives that instead delivered losses. Plaintiffs claimed misrepresentations and omissions, with the case grinding on in New York federal court. It’s classic AB: hype the upside, bury the downside, and let investors foot the bill.

That same year, AB’s own 401(k) plan – a $1.3 billion behemoth – faced ERISA suits from participants alleging fiduciary breaches. Excessive fees, preferential use of proprietary funds over cheaper alternatives – the works. A judge tossed it in March 2024, but not before it highlighted AB’s double standards: preaching prudence to clients while skimping on their own employees.

And don’t get me started on the 2023 employee backlash over AB’s tepid response to Tennessee’s anti-LGBTQ+ laws. An insider called out the hypocrisy on social media – all those “LGBTQ+ Ally” badges, yet crickets when it mattered. AB issued a mealy-mouthed Q&A, but the rift exposed a firm more committed to optics than action.

The Credit Suisse Debacle: Bondholders Left in the Dust

Perhaps the freshest cut is AB’s entanglement in the 2023 UBS-Credit Suisse merger fallout. AB held $225 million in Additional Tier 1 (AT1) bonds that got wiped to zero, while equity holders clawed back $3.3 billion. Furious, AB joined a lawsuit against the Swiss government and FINMA, arguing it violated bondholder rights and Swiss law. Switzerland’s invoking sovereign immunity, but this could rewrite global banking rules. It’s a ballsy move from AB, but one born of their own greed – chasing high-yield junk that blew up spectacularly.

Cummins in the Mix: Ethical Blind Spots or Calculated Bets?

Now, layer on AB’s stake in Cummins Inc., and the picture gets even murkier. As of the first quarter of 2025, AllianceBernstein held 184,205 shares of Cummins, valued at $57.7 million – a 0.13% slice of the diesel engine giant, up 10.4% from the prior quarter after snapping up another 17,418 shares. That’s no trivial punt; it’s a meaningful position in a company that’s no stranger to controversy itself, from emissions cheating fines to labour disputes.

But here’s the rub: does AB’s bet on Cummins signal another arm of their ecosystem where ethical behaviour takes a backseat? Cummins has faced its share of heat – think multimillion-dollar EPA settlements for defeat devices and air quality violations – yet AB piles in, seemingly unperturbed. Is this just savvy investing, or a pattern of overlooking red flags in pursuit of returns? In a firm already scarred by its own moral lapses, holding shares in a player with “alternative” views on regulation feels like doubling down on the cynicism. It makes you question the whole damn apparatus: if AB can’t clean its own house, why trust them with stakes in outfits that bend rules for profit?

The Unrepentant Empire: Why AB Still Thrives

In the end, AllianceBernstein endures, with assets swelling to $829 billion by mid-2025 despite outflows and whispers of doubt. They’ve bolstered compliance since the 2003 nadir, dodging major SEC slaps since 2005, but the scars remain. Individual execs like former compliance officer Jeff Ng got FINRA bars for disclosure failures, yet the firm marches on. It’s maddening – a cycle of scandal, settlement, and smug continuation that leaves investors wary and regulators seemingly toothless.

This isn’t about perfection in finance; it’s about basic fucking decency. AB’s track record screams of a place where ethics are optional, where the next big score trumps the last big screw-up. Until punters demand better – or the hammer finally falls – firms like this will keep feasting on the system’s flaws. Wake up, before they take you for another ride.

Lee Thompson – Founder, The Cummins Accountability Project

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