Also, the firms must compensate customers disadvantaged by those supervisory failures. Chase will pay an additional $288,500 and MetLife $376,000 into roughly 300 customer accounts.
The NASD found that neither firm had procedures in place to oversee the sale of 529 plans, including suitability requirements, from January 2002 through August 2004 for Chase and January 2002 through March 2005 for MetLife. During these time periods, Chase’s 529 plan sales exceeded $134 million, while MetLife’s were over $150 million, according to the NASD. Both companies neither admitted nor denied the findings.
These are the second and third cases to result from the NASD examining firms on the sale of 529s. In October 2005, Ameriprise Financial Services was fined $500,000 and ordered to pay approximately $750,000 to customers.