The National Association of Securities Dealers censured and fined McLaughlin, Piven, Vogel Securities and its chairman, James C. McLaughlin, $100,000 for unsuitable sales of B shares. Saying that A shares would have been more appropriate, NASD also ordered the firm to return $90,000 to investors.
The NASD said the $9.3 million worth of transactions took place between June 1998 and May 2002 and affected 21 investors.
The NASD, which has brought more than a dozen cases against improper sales of class B shares over the past two years, said it will continue to focus on this issue. NASD also issued an investor alert Wednesday spelling out the various pros and cons of different share classes.
- The firm and its chairman neither admitted or denied the charges, but consented to the findings and agreed to hire an independent consultant to review its sales practices.
"Todays enforcement action puts brokers on notice that investors must be sold an appropriate class of mutual fund, and our investor alert gives investors the tools to educate themselves about the costs involved when purchasing class B shares," said Mary L. Schapiro, NASD vice chairman.