A U.S. subsidiary of Dutch financial services firm ING Group said on Friday the NASD has made a preliminary recommendation that an enforcement action be brought against an affiliate and one of its registered agents, Reuters reports.
ING Insurance Co. of America said that ING Funds Distributor had received a notice from the regulatory agency and it has an opportunity to respond before NASD staff makes a final recommendation, according to a filing with the Securities and Exchange Commission.
At issue are three arrangements dating back to 1995, 1996 and 1998 in which the administrator to the then-Pilgrim Funds allowed frequent trading. The Pilgrim Funds later became part of the ING Funds.
In September, ING said that an internal review of its mutual fund trading operation showed only isolated incidents of impropriety and that its plans to reimburse fund shareholders would not have a significant impact on its earnings.
An ING spokeswoman told Reuters that the company is "continuing to cooperate and have discussions with the NASD."