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Industry Spotlight > Broker Dealers

NASD Announces $9.2 Million In Disclosure Fines

By Staff Writer

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NU Online News Service, Nov. 30, 2004, 6:59 p.m. EST

Securities regulators want securities firms to do a better job of reporting problems with brokers.[@@]

NASD, Washington, has imposed $9.2 million in fines on 29 securities firms in connection with charges that the firms were late with more than 8,000 disclosures of reportable information about their brokers.

More than a quarter of the firms are units of insurance companies.

The reportable information dealt with matters such as customer complaints, regulatory actions, and criminal charges and convictions, NASD says.

NASD evaluated disclosures made at member firms between January 2002 and March 2004. NASD found that the 29 firms subject to fines “failed to timely report at least 25% of the required disclosures in the areas reviewed by NASD,” NASD says.

Some firms failed to meet disclosure requirements more than 70% of the time, NASD says.

Evaluators “also found that each firm failed to have supervisory systems and procedures in place reasonably designed to achieve compliance with these reporting requirements,” NASD says.

The firms that were fined neither admit nor deny NASD’s allegations, but they have agreed to pay the NASD fines and conduct internal audits of their compliance systems, NASD says.

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