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Monday April 18, 05:51
American Funds undergo across-the-board probe for any wrongdoing
(by Helen Snow)

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The American Funds family is facing troubles with several regulatory agencies.

In February, the National Association of Securities Dealers accused the American Funds of chanelling $100 million in commissions to the brokerage firms that most aggressively sold the company’s funds from 2001 to 2003. With such moves American Funds are blamed with breaking the so called "anti-reciprocal rule".

The Securities and Exchange Commission is conducting investigation of American Funds’ transactions for similar reasons.

The California Attorney General’s office has also been looking into the situation. But the firm doesn’t believe the case should be passed to state courts since the National Securities Markets Improvement Act of 1996 preempted regulation by individual states.

The American Funds’ official statement confirmed that the funds distributor did make commissions to brokerage firms, but did it legally untill the SEC announced it illegal last year.

In this case investors and shareholders find themselves in the most strange position as have no tools to influence the situation doing nothing but waiting.
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