SEC Sides with American Funds Against Finra
   The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
Friday, July 01, 2011

SEC Sides with American Funds Against Finra

It took six years, but, thanks to the SEC, Capital Group [see profile] just defeated a $5-million attack from the NASD, now called Finra. Last Friday the commission overturned a Finra finding that claimed American Funds Distributor violated the so-called "anti-reciprocal rule," which prohibits directing trading (and thus trading commissions) to broker-dealers based on those broker-dealers' sales of mutual fund shares[see opinion].

Morningstar's Susan Daker covered the news in the "Fund Times" column.

Morningstar finds it "interesting" but "understandable that the firm would vigorously defend itself against the appearance of impropriety" for so many years, to protect its traditionally strong relationship with advisors. The case, first brought by the NASD in 2005, centers around alleged misconduct between 2001 and 2003. American Funds filed its appeal to the SEC more than three years ago, on May 29, 2008.

Printed from:

Copyright 2011, InvestmentWires, Inc.
All Rights Reserved
Back to Top