Dozens of Brokerages Miscalculated Breakpoints

Dozens of brokerages failed to fully compensate mutual fund investors for breakpoints owed to them for purchases in 2001 and 2002, The Wall Street Journal reports, and the NASD is expected to take enforcement action against them.

The NASD ordered the brokerages to assess the proper fees investors should have been charged after fining 15 such firms $21.5 million in 2004 for not passing along breakpoints.

The NASD is now examining “quite a few of those cases again,” said NASD Enforcement EVP James Shorris. Emily Gordy, EVP for enforcement at the NASD, confirmed that the regulator found a number of problems and “extreme carelessness.”

While the NASD won’t bring fraud charges, it is considering charging the companies with negligence, failure to provide accurate information and books and recordkeeping violations.