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The NASD also separately charged Bullock for accepting those payments and not revealing them.
“NASD will vigorously challenge all conduct that impermissibly compromises a broker’s objectivity, especially when retirement money is at stake,” said James S. Shorris, NASD executive vice president and head of enforcement. “In this case, Securities America approved Bullock’s improper arrangement to receive directed-brokerage commissions from mutual fund company portfolio transactions while advising his retirement plan clients to invest in this same mutual fund company’s securities. This violation of NASD’s rules governing mutual fund compensation, when coupled with the failure to disclose to the firm’s clients the terms of his financial arrangement, made for an intolerable situation.”
The NASD said this is the firm time a fund company directed brokerage specifically for the benefit of an individual broker, rather than to obtain overall shelf space at a brokerage firm.