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NASD Fines American Funds Distributors $5 Million

Law360 (August 30, 2006, 12:00 AM EDT) -- An NASD panel censured and fined American Funds Distributors Inc. at a hearing on Wednesday, saying the company violated NASD’s Anti-Reciprocal Rule by giving brokerage commissions to the securities firms that sold the most American Funds mutual funds.

The panel fined American Funds $5 million for the breaches, which allegedly took place from 2001 to 2003.

The Anti-Reciprocal Rule is meant to abolish “reciprocal business practices in connection with the distribution of mutual fund shares,” said the panel. It was created to protect individual investors from...
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