Summary
This 8-K filing from American Express Company (AXP) reports that its broker-dealer subsidiary within the American Express Financial Advisors (AEFA) operating segment has received a notification from NASD, Inc. (NASD). The NASD staff has made a preliminary determination to recommend bringing an action against AEFA concerning alleged violations of federal securities laws and NASD rules. These allegations stem from an industry-wide review of mutual fund and brokerage practices and specifically relate to AEFA's revenue sharing arrangements with certain non-proprietary mutual funds.
Key Highlights
- 1AEFA received a notification from NASD regarding potential violations of securities laws and regulations.
- 2The allegations are part of a broader industry-wide review of mutual fund and brokerage practices.
- 3Specific allegations include AEFA's failure to properly disclose revenue sharing arrangements from January 2001 to May 2003.
- 4AEFA is also accused of failing to disclose these arrangements on brokerage confirmations.
- 5The NASD alleges AEFA received directed brokerage from January 2001 to December 2003.
- 6AEFA intends to discuss these issues with the NASD staff.
- 7AEFA is cooperating fully with the NASD inquiry and other regulatory inquiries.