NASD Breakpoint Order Could Cost B/Ds Millions

The National Association of Securities Dealers has made good on its investigation into unpaid fund breakpoints by ordering members to promptly pay investors this money, plus interest, in cash or in cash deposits to their account. NASD wants brokers to pay the amounts plus 2.5% simple interest for overcharges between Jan. 1, 2001 and the present.

For charges before that time, NASD refers brokers to the six-month CD rates on the Federal Reserve Web site. The NASD’s order does not specify how far back in time brokers must check their records, but Mike Shokouhi, a spokesman for the NASD, said brokers will have to pay breakpoints "as far back as need be. If someone has been with a firm for 20 years, [the refund owed] could be for 20 years."