The National Association of Securities Dealers Inc. has fined 3 securities firms for market-timing transactions and other violations.
ING Funds Distributor L.L.C., First Allied Securities Inc. and PennMutual Life Insurance Co.’s Janney Montgomery Scott LLC were fined a total of $3.1 million and ordered to pay restitution totaling $2.7 million.
Marketing-timing transactions use rapid trading strategies to profit from the uneven flow of information on price and other data as it moves through worldwide markets. The practice itself is not necessarily illegal, but regulators have said it is improper when it violates a fund’s policies.
All 3 companies have consented to the NASD’s findings on the issue, but they neither admit nor deny the allegations, according to the NASD. It levied the largest fine against ING, totaling $1.5 million with an additional $1.4 million in restitution to the affected funds. Janney Montgomery Scott will pay a fine of $1.2 million and pay approximately $1 million in restitution to the affected funds, and First Allied Securities will pay a fine of $408,000 and restitution of $326,500.