Linsco/Private Ledger Fined For IllegalMutual Fund Sales

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WASHINGTON - (06/10/05) -- Linsco/Private Ledger Corp., one ofthe most popular third-party brokers for credit unions, was among15 broker-dealers fined a total of $34 million by the NASD thisweek for payments they received to push certain mutual funds.Boston-based LPL, which provides brokerage services for more than100 credit unions, agreed to pay $3.6 million as part of asettlement deal with the NASD. LPL, according to the NASD,maintained shelf space (or revenue sharing) programs in whichparticipating mutual fund complexes paid a fee in return forpreferential treatment, which included enhanced access to thefirm's sales force, participation in firm meetings and placement ofpromotional material on the firm's internal website. One fundcomplex paid all, and some paid part of their fees forparticipating in the programs by directing over $14.4 million inbrokerage commissions to LPL.

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