Securities America fined $375,000

A securities company has been fined for improperly shared directed brokerage commissions.

In a case that NASD is calling the first case of its kind, a securities company has been fined for improperly shared directed brokerage commissions from a mutual fund company with a single broker.
NASD has fined Securities America Inc. $375,000 for improperly sharing directed brokerage commissions from a mutual fund company.
NASD also charged Michael Bullock, the Los Angeles-based broker, with receiving more than $280,000 in improper commissions and other compensation.
Mr. Bullock was also charged with misrepresenting and failing to disclose the compensation to his retirement plan clients.
Securities America agreed to the penalty without admitting nor denying any wrongdoing.
NASD found in its settlement that Mr. Bullock negotiated an arrangement with a mutual fund company to have thousands of dollars of brokerage commissions directed to him every month for his benefit.
Mr. Bullock used the additional compensation to hire a sales assistant, formerly employed by the fund company, to help him find new retirement plan clients.
Securities America approved the arrangement from 2002 through 2003, and received $420,000 in directed commissions from the fund company for Mr. Bullock’s benefit. Securities America paid Bullock $262,500 and retained the remaining $157,500.
NASD said that Mr. Bullock sought and received a $20,807 check directly from the fund company to cover expenses.