Nasd

Fidelity Investments, the world's largest mutual fund company, said that federal regulators are investigating whether its employees took improper gifts in exchange for directing business to brokers at outside firms. Fidelity uses outside brokers to execute securities trades. The Boston company, which oversees about $1 trillion for clients, is cooperating with investigations by the Securities and Exchange Commission and the NASD, Fidelity spokeswoman Anne Crowley said yesterday. Fidelity also is conducting its own review, she said.

Even a casual observer could see that Mary Alice Brophy is about to enter a minefield.The director of compliance at Dain Bosworth in Minneapolis, Ms. Brophy, 48, last week was elected to chair the board of governors for the National Association of Securities Dealers. It's a powerful, prestigious position that commonly has been held by chief executives.And always has been held by a man.Founded in 1939, the NASD oversees both the nation's half-million securities brokers and the Nasdaq stock market, the country's second largest.

NEW YORK - The NASD accused H&R Block Inc. yesterday of civil fraud for selling $16 million in Enron Corp. bonds in the weeks before the energy company collapsed in December 2001. About 200 brokers for H&R Block Financial Advisors Inc. sold the debt to more than 800 customers in October and November 2001, said the NASD, formerly the National Association of Securities Dealers. The value of the bonds plunged when Enron filed for Chapter 11 protection in December of that year in what was then the biggest bankruptcy in U.S. history.

Ameriprise Financial Services Inc. of Minneapolis must pay about $750,000 to investors who were sold an out-of-state college savings plan that cost them valuable income tax breaks from their home states, the NASD announced yesterday. It is the first enforcement action that NASD, the self-regulating arm of the securities industry, has taken regarding the sale of college savings plans since it launched an investigation two years ago. The $750,000 will be paid to owners of more than 500 accounts.

WASHINGTON -- The National Association of Securities Dealers said yesterday that automated trading halts should occur only if the market falls 500 points or more, considerably more than the current threshold.At present, a 250-point decline in the Dow Jones industrial average from the previous day's close triggers so-called "circuit breakers" that halt trading for an hour.The circuit breakers halt trading for two hours if the industrial average, composed of 30 blue-chip stocks, goes down 400 points.

The National Association of Securities Dealers Inc. couldn't have done better when it landed Joseph R. Hardiman as president nine years ago.He was a hot shot at Alex. Brown Inc., the No. 2 man at the venerable Baltimore-based brokerage firm, a driven worker with a reputation as an excellent manager and team builder.And he did nothing to disappoint his backers after he was named president and chief executive of NASD in June 1987.At NASD, the umbrella organization that oversees the activities of more than 5,400 securities firms, 500,000 brokers and the Nasdaq stock market, Hardiman led the overhaul of the stock market's computer systems.

At 11:33 a.m. yesterday, shares in Columbia-based Sylvan Learning Centers were selling for $32.50. Eighteen minutes later, they were selling for $35.125 -- an 8 percent jump.At 1:17 p.m., Bloomberg News Service carried an alert that trading in Sylvan stock on the Nasdaq exchange had been suspended pending an announcement by the company. At 1:21, Sylvan said it had landed a lucrative new contract that would dramatically increase its visibility.That confluence of events would normally be enough to attract the attention of the market watchdogs of the National Association of Securities Dealers -- ever alert for signs that investors might be trading on insider information.

NEW YORK -Citigroup, the world's largest financial company, will pay client Linda Nash more than $1.5 million for improperly handling her WorldCom Inc. investment, the NASD said yesterday. It is the largest amount awarded to a claimant against Citigroup this year, according to the NASD's Web site. A three-member NASD hearing panel found that Mark Clayton Callaway, a Salomon Smith Barney broker based in Atlanta, and Salomon Smith Barney Inc. were liable for Nash's "claims of breach of contract and negligence and for violations of federal and state laws," the NASD said.

AS THE stock market rises, so does the amount of fraud. If Willie Sutton were alive today, he wouldn't rob banks, he'd set up a thieving stockbrokerage house.The bad guys generally tout "penny stocks" -- stocks priced under $5 a share or perhaps just a little bit more.These stocks are often listed on the OTC Bulletin Board or Nasdaq SmallCap Market. Both are overseen by the National Association of Securities Dealers (NASD), so many investors take the listing as a seal of approval.Not so. The Bulletin Board will list any stock that comes along, even empty shells.

NEW YORK -- The Securities and Exchange Commission has found evidence of widespread violations of trading regulations in the Nasdaq stock market and is working toward filing a major, highly unusual disciplinary case against Nasdaq's parent organization, according to sources familiar with the SEC investigation.Civil charges are expected to be filed as early as September against the Washington-based National Association of Securities Dealers, an organization of most of the nation's securities firms, sources said in interviews over the past two weeks.