NASD Fines AIG Unit Over Brokerage Practice

The NASD fined a unit of American International Group Inc. more than $1.1 million Wednesday for alleged directed brokerage violations.

The NASD, formerly the National Assn. of Securities Dealers, said that from January 2002 through September 2003, American General Securities Inc. operated a “shelf space,” or revenue sharing, program in which participating mutual fund companies paid a fee in return for preferential treatment.

The benefits by the shelf space program were offered to 12 mutual fund companies during the period, with the fund companies paying extra fees to American General for the preferential treatment.

New York-based AIG, one of the world’s largest insurance companies, provides property-casualty and specialty insurance, as well as financial services and asset management.

AIG shares fell 12 cents to $65.95.