The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:American Funds To Battle NASD Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, March 16, 2006

American Funds To Battle NASD

by: Armie Margaret Lee

American Funds is taking the road less traveled. Next week, the Los Angeles-based mutual fund firm will challenge accusations brought by the NASD that it improperly steered directed commissions to top producing brokerages.

The Los Angeles Times reported Thursday morning that American Funds is set to appear before a hearing panel of the NASD on Monday to dispute the claims. In doing so, American Funds is veering away from the path taken by its peers, which have opted to resolve regulators' complaints by paying fines without admitting or denying any wrongdoing.

In February 2005, NASD filed a case against American Funds, claiming that it broke securities rules from 2001 to 2003 when it gave stock trading business to brokerages that promoted its funds to clients.

According the regulator, American Funds sent $100 million worth of commissions to 50 broker-dealers as a reward for selling the firm’s 29 mutual funds. The directed-brokerage payments were also an inducement for future sales of the funds, the NASD alleged.

American Funds, however, maintained that it never had such formal agreements with broker-dealers. What it had were “internal, informal targets” for directing trades, which was allowed under the rules, the firm said.

So far, 30 fund companies and brokerages have settled similar cases with the NASD.

American Funds, which has over $850 billion in stock and bond fund assets under management, is facing similar charges brought by California Attorney General Bill Lockyer. 

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2023
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use