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The questionable sales and calls took place between October 2003 and March 2005, according to the NASD.
The self-regulatory body is also requiring the company to improve its e-mail retention practices, ensure that it obtains written consent from prospective new supervisors to review their past records and review the resources it devotes to compliance. The NASD is also requiring Citizens Bank to keep thorough records of compensation to its brokers by issuers of variable contracts and mutual funds. In settling with the NASD, Citizens Bank neither admitted to nor denied the findings.
“This bank-affiliated firm missed the mark with regard to several important requirements, including some that impacted retirees, an especially vulnerable group for whom NASD rules, the federal securities laws and the telemarketing laws provide valuable protections,” said NASD Executive Vice President and Head of Enforcement James S. Shorris.
“Like any securities firm, the bank-affiliated broker/dealers must have adequate supervisory systems and controls for ensuring compliance with regulatory requirements,” Shorris added.