American Express Co.'s financial advisory unit violated its fiduciary duty to clients when it provided secret incentives to its sales force to sell poorly performing in-house mutual funds, instead of investments from competitors, New Hampshire regulators allege, according to The Wall Street Journal.

American Express Financial Advisors rewarded its sales staff with higher bonuses, more praise and in some cases with free one-year leases on Mercedes-Benz cars, for selling the proprietary funds. The New Hampshire Bureau of Securities Regulation investigated the unit's sales practices between 1999 to 2003 and asked a hearing officer to impose penalties of up to $17.5 million, including restitution.

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