The NASD has fined the former Quick & Reilly, now a member of the Banc of America Investment Services family, $570,000 for directed-brokerage violations. In addition, NASD imposed a $275,000 fine on Piper Jaffray for similar abuses. The Piper Jaffray fine was adjusted to reflect the firm's voluntary disclosure of its wrongdoing, which was uncovered during a self-evaluation.
According to NASD officials, both firms operated preferred-partner or shelf-space programs that gave as many as 15 fund complexes at Piper and 20 at Quick & Reilly higher visibility on the brokerages' Web sites. The special treatment also included increased access to their sales forces, participation in "top producer" and training meetings, and broader promotion than for other funds.