From the December 2006 issue of Investment Advisor • Subscribe!

December 1, 2006

NEWS & PRODUCTS

Goldman Sachs and Lehman Brothers won Diversity Leadership Awards from the Securities Industry and Financial Markets Association (SIFMA). Goldman Sachs received the Sustained Leadership Award for its ascend Leadership Exchange program, launched in 2002, of conferences for women executives, given around the world on global and business issues, by senior Goldman Sachs female execs. Lehman Brothers won the Innovative Leadership Award for its Encore Program, launched in 2005, designed to help professional women, who have taken time out from their careers, to successfully re-enter the workforce at Lehman Brothers...

The SEC announced that three subsidiaries of Hartford Financial Services Group, Inc.-- Hartford Financial Services, LLC; HL Investment Advisors, LLC; and Hartford Securities Distribution Company, Inc.--will pay $55 million to settle charges that they failed to disclose to fund shareholders and the funds' Boards of Directors that they used fund assets to pay for the marketing and distribution of Hartford mutual funds and annuities. The three subsidiaries agreed to pay a $15 million penalty and to relinquish $40 million in "ill-gotten gains." The total will be distributed to the affected Hartford funds...

Fidelity Capital Markets Services, a unit of Fidelity Brokerage Co., announced the availability of CrossStream, an alternative trading system that "anonymously matches brokerage clients' buy and sell orders against the order flow of Fidelity Brokerage Company, without publishing bids and offers and before clients' orders hit the street." CrossStream offers a range of order types, including market, limit, pegging, discretion, and minimum/maximum order quantity. The technology was created to give users the ability to increase fill rates by giving access to large, liquid securities that can be moved in bulk, as well as smaller, less-liquid issues that can be difficult to trade in the public markets...

NASD charged Chase Investment Services Corporation of Chicago and MetLife Securities, Inc. of New York with failing to establish systems and procedures to supervise the sales of 529 College Savings Plans. The firms made these sales without providing specific criteria or guidance for their registered representatives to use when recommending plan purchases. Both firms also neglected to establish criteria for supervisors to use when reviewing 529 Plans recommended by their registered representatives and failed to establish effective procedures concerning documenting the suitability of determinations that were made. The firms were fined $500,000 each and ordered to compensate customers affected by the failure. Chase will pay approximately $288,500 into about 300 customer accounts, while MetLife will pay approximately $376,000 into a similar number of accounts...

The SEC approved the adoption of NASD Rule 3170, requiring firms to submit any regulatory notice and certain notices required by the Securities Exchange Act of 1934 electronically via an Internet-based receiving and processing system that uses templates developed by NASD for each notice. Although this rule change becomes effective December 6, 2006, members are not required to file electronically until January 1, 2007.

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