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American Funds, NASD Head To Court

Law360 (March 16, 2006, 12:00 AM EST) -- Mutual fund firm American Funds, accused by the National Association of Securities Dealers of illegally paying brokerages that promoted its funds, has eschewed the common practice of settling with regulators and instead has decided to meet the NASD in court.

In a hearing that will begin Monday, the NASD will have to prove the allegations lodged against American Funds, which last year surpassed Fidelity Investments to become the country’s largest fund manager.

The industry-wide probe into the relationship between mutual funds and brokerages has thus far...
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