Six units of AIG among firms paying $34m in NASD case
NEW YORK ? Six units of American International Group Inc. are among 14 brokerages and a fund distributor that agreed to pay $34 million for allegedly accepting fees from mutual funds in exchange for recommendations to clients, the NASD said. The firms were accused of working harder to sell funds that paid fees, a practice known as directed brokerage. These payments, often paid out of fund assets, are usually hidden from shareholders. ?When recommending mutual fund investments, firms must act on the basis of the merits of the funds and the investment objectives of the customers and not because of other benefits the brokerage firm will receive,? NASD vice chairman Mary L. Schapiro said. The firms, which include AIG?S Royal Alliance Associates Inc. and SunAmerica Securities Inc., neither admitted nor denied wrongdoing.