Financial services planners shouldn't expect NASD regulatory enforcement actions to go away. However, the scrutiny pertaining to gifts, travel, and entertainment guidelines may have peaked, according to Maribel V.Gerstner, associate vice president and chief compliance officer, Allstate Distributors & ALFS Inc., Northbrook, Ill.
NASD (the governing body for securities firms) was quite active last year, with the biggest enforcement action involving Fidelity brokerage units that were fined $3.75 million in the aftermath of a gift and entertainment probe dating back to 2004. The probe also resulted in fines against the New York-based brokerage firm Jeffries & Co.
"You saw a lot of activity around those issues [in 2006]--enforcement actions and letters to [NASD] members specific to those rules," says Gerstner. "When more firms are disciplined and fined, and you see them get called on the carpet, then all of us start tightening up our rules and oversight, and regulatory scrutiny in that area begins to ebb a little. Then NASD starts to focus on other areas--it's part of a natural cycle."
