Piper Jaffray said in a filing this week that the National Association of Securities Dealers has told the firm to expect disciplinary action for directed-brokerage arrangements it entered into with several fund firms, the Associated Press reports.

Directed-brokerage deals, prohibited by the NASD, involve fund firms sending trading business to brokerages as a form of compensation for the brokerage selling the funds. However, the practice has come into question because of a potential conflict of interest, whereby a broker may push unsuitable funds to investors so that it can reap the benefit of the trading commissions it receives.

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