FINRA Fines American Funds

Published Wednesday, April 30, 2008

Every rep loves American Funds: The fund family—the nation’s largest, with $1 trillion in assets—offers decent performance for relatively inexpensive fees. Oh, and you won’t get fired for putting clients in an American Fund offering. But today FINRA spanked the fund giant for “directed brokerage,” a now-banned practice of directing trades to the trading desks of top-selling brokerages. (Click here for the FINRA press release and a link to the ruling.) FINRA let a 2006 case stand that found American Funds Distributors guilty of unfairly compensating brokerages that sold the funds. American will have to pay ...

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