The National Association of Securities Dealers Inc. has imposed a $1.1 million fine on American General Securities Inc.
American General Securities, Houston, is a unit of American International Group Inc., New York.
From January 2002 to September 2003, American General Securities violated NASD rules against directed brokerage — rules prohibiting NASD member companies from charging mutual fund companies for preferential treatment – by letting some fund companies pay to join a “Preferred Product Sponsor” program, according to the NASD, Washington.
In addition, from July 2003 to September 2003, American General Securities failed to promptly forward more than 2,100 customer checks that it had received in connection with certain mutual fund and variable annuity transactions, and from November 2001 to September 2003, American General Securities failed to comply with federal laws and NASD rules governing electronic communications, the NASD says.
American General Securities has neither admitted nor denied the allegations, and Peter Tulupman, an AIG spokesman, says this case is related to a group of several similar cases that were resolved in June 2005.
American General Securities already had stopped using the practices described by the NASD by the end of the review period, Tulupman says.
“We will continue to cooperate fully with regulators on this issue and any other issues,” Tulupman says.