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NASD Reports Spike in Fund Complaints


There were 543 cases filed in 2001 with the NASD Dispute Resolution arbitration forum that alleged problems with mutual funds, according to recently released statistics. That's an increase of more than 108% from 2000, when 261 such cases were filed.

For all securities firms, there were 7,088 new claims filed with the regulatory body, an increase of 24% from those filed in 2000. NASD Dispute Resolution handles monetary and business disputes between investors and securities firms, and employment and business disputes between "associated persons" and firms.

Although a breakdown of mutual fund cases specifically was not available, the most common cases involved: breach of fiduciary trust (3,458); negligence (2,275 cases); failure to supervise (1,968 cases); and misrepresentation (1,895 cases). The number of unsuitability cases, however, jumped most dramatically in 2001 to 1,524, up from 900 in 2000, an increase of 69%.