Complaints Up, Collections Down at NASD
June 4, 2007
The NASD collected roughly half the amount of fines in 2006 compared to 2005, taking in $84.9 million in 2006, compared to $134.3 million in 2005, according to its annual report. The NASD issued another $75 million in fines in 2006, compared to $148.5 million in 2005.
The number of disciplinary actions also slipped, going from 1,447 in 2005 to 1,344 in 2006, a 7% decrease. In 2006, the NASD started 1,204 new investigations into disciplinary actions, down 14% from 1,399 in 2005.
During the same period, however, complaints rose. In 2006, there were 5,671 complaints, up 10% from 2005's 5,137 complaints.
Fees also rose. The New York-based regulator collected $222 million in regulation fees in 2006, compared to $185.4 million in 2005 and $158.7 million in administrative fees in 2006, compared to $145.3 million the year prior.
Because fines are not counted in net revenue, that sum dipped to $586 million, from $603.1 million in 2005.
The NASD cited the closure of several high-profile investigations as the cause for the dip, including the conclusion of cases that stemmed from the mutual fund late-trading, market-timing and soft-dollar scandals of the early part of the decade.
The Securities and Exchange Commission also cited a dip in enforcement referrals in 2006, with the Office of Compliance Inspections referring only 15% of broker/dealer cases to enforcement, compared to 22% in 2005 and 27% in 2004.
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