The brokerage subsidiary of H&R Block, the nation’s No. 1 tax preparer, said it could be punished for improper mutual fund trades, Reuters reports.

The NASD has taken preliminary steps to reprimand H&R Block Financial Advisors for alleged market timing mutual funds at one of its Florida offices. Through spokesman Bob Schneider, Kansas City-based H&R Block said it is cooperating, and has reported the NASD investigation in a Securities and Exchange Commission filing.

Schneider told Reuters his company is being investigated for "unsolicited mutual funds trading by certain customers," rather than H&R Block advisors themselves helping out on the transactions. The two brokers who handled the accounts where the alleged market timing took place are no longer employees of Block.

Amid the news Tuesday, shares of H&R Block on the New York Stock Exchange dropped 30 cents to $51.60. Despite that, Schneider said, "We don’t believe this is going to be of a material effect on the company either financially or operationally."

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