In a year filled with securities industry scandals and settlements, the Securities and Exchange Commission has uncovered a new source of potential conflicts of interest. It could be yet another reason to expand the already overwhelming number of disclosures required of investment advisors and broker/dealers.

TD Waterhouse agreed to pay $2 million in a settlement over charges that it made undisclosed cash payments to three registered investment advisors to win their brokerage business. Two of the advisors implicated also agreed to settle. Both Kiely Financial, based in Greenville, N.C., and Rudney Associates of San Ramon, Calif., agreed to disgorge the money they received from TD Waterhouse, to pay civil penalties and to stop accepting undisclosed cash payments.

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