On April 12, the NASD came to a preliminary determination to recommend disciplinary action against the member firm for violating rules of conduct related to mutual fund market-timing and failure to supervise.
The NASD also determined that Glenn Davis, president of the firm, apparently failed "to supervise as he did not participate in any of the trades identified by the NASD as rule violations." The violations were conducted in August and September by New York-based Paulson employees.
The self-regulatory organization is seeking $341,000 in restitution and $525,000 in fines, but Paulson is fighting the charges. It must file a response to the NASD by May 17 and, if the matter is not settled, it will be heard before the NASD.
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