NASD Fines Three Investment Firms

Three major investment firms have been fined $250,000 each by securities regulators, who accused them of failing to provide required documents to investors bringing claims against brokers in 20 arbitration cases in the last two years.

The NASD, formerly the National Assn. of Securities Dealers, the brokerage industry’s self-policing organization, announced the civil fines Monday against Citigroup, Merrill Lynch and Morgan Stanley.

The NASD also censured the Wall Street firms for the alleged violations of brokerage industry rules related to securities arbitration proceedings.

The three firms neither admitted to nor denied the allegations in their settlements with the NASD.

They agreed to install new written procedures to ensure that future such violations are brought to the attention of senior executives at the firms.

The NASD said that in each case, the firms failed to fully comply with rules requiring them to produce documents, even after the NASD arbitration panels hearing the cases had ordered them to do so and fined them as much as $52,000.

“NASD is committed to making our arbitration forum faster, fairer and less expensive than court procedures,” NASD Chairman and Chief Executive Robert Glauber said.