Securities regulators have launched an informal probe of mutual fund and brokerage firms to determine whether brokers doled out lavish gifts to attract trading business.
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The NASD prohibits any employee of a member firm from giving a business associate a gift exceeding $100 in value over the course of a year. That rule does not apply to client dinners and other forms of standard business entertainment, but rather egregious spending on big-ticket items.
"Were concerned about any conflict of interest that could distract a mutual fund trader from his obligation to consider the interests of fund investors first and foremost," Lori Richards, director of the SECs office of compliance, inspections and examinations, told the New York Times.
The investigation seems to have been prompted by the noise surrounding a trader at