Evergreen Reaches $4.2 Million Settlement With NASD

Evergreen Investments announced that it agreed to pay a $4.2 million civil penalty to the NASD over directed-brokerage practices by its broker/dealer distributor. At question, in such practices, is the acceptance of trades from mutual fund complexes, such as Evergreen, in exchange for promoting their funds, without revealing the practice to investors.

Evergreen made the disclosure through a letter from Chief Executive Officer Dennis H. Ferro on the company website. Ferro noted that the interpretation of NASD rules was “uncertain,” as well as that litigating with the NASD would usurp much of the company’s “time, resources and attention.”

“Ultimately, we concluded that it was in Evergreen’s and our client’s best interest to resolve these matters and move forward,” Ferro said.

He also noted that the firm does not believe that the practice adversely affected the performance of the funds and that the settlement also won’t affect shareholders monetarily.