The NASD has reached a settlement with Waddell & Reed over allegations that the Shawnee Mission, Kan.-based money manager profited by illegally switching the variable annuities of more than 5,000 customers.

Under the terms of the settlement, Waddell & Reed will repay up to $11 million to customers whose annuities were exchanged by the company. It will pay a fine of $5 million to the NASD and a fine of $2 million to state regulators.

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