Nasd

WASHINGTON -- The National Association of Securities Dealers fined nine New York-area brokers as much as $50,000 apiece yesterday and permanently barred them from the securities industry for paying impostors to take their licensing exams.Several of the brokers, all from penny-stock firms, also were ordered to refund illegal profits, which amounted to $440,000 in one case.The charges are the second wave connected to the most widespread brokerage test-taking fraud in recent years. In August, 10 brokers and two brokerage employees were fined and permanently barred by the NASD for paying stand-ins to take the Series 7 licensing exams.

Sylvan Learning Systems Inc. says it has been sued by American College Testing Service over charges that Sylvan broke laws in its successful fight for a National Association of Securities Dealers' contract.In January, Columbia-based Sylvan was awarded a 10-year contract to conduct the NASD's Series 7 exams for licensing brokers. American College Testing, a not-for-profit, also sought the contract, which Sylvan said will be worth $5 million to $6 million annually.American College Testing charges in a suit filed in federal court in Cedar Rapids, Iowa, that Sylvan interfered with an agreement it had pending with the NASD and violated antitrust laws, Sylvan said.

The National Association of Securities Dealers has fined Alex. Brown Inc. $100,000 and is forcing the company to give up $150,000 in commissions because one of its brokers violated securities rules governing overseas transactions.The broker, Beaumont Bianchi, who works in Alex. Brown's Los Angeles office, will pay a separate $50,000 fine as part of the disciplinary action, the NASD said yesterday.A. B. "Buzzy" Krongard, Alex. Brown's chairman and chief executive, said the Baltimore-based brokerage and investment banking firm would pay the fine "ASAP."

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.

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.

BOSTON -- Morningstar Inc. has all but thrown in the towel in what was from the beginning a lopsided battle with the National Association of Securities Dealers.The issue is whether it's appropriate to grade mutual funds on a single year's performance.One thinks it's dumbMoney manager David K. Schafer thinks the NASD demand that Morningstar, an influential research group, start grading mutual funds based on their one-year record is a "dumb idea.""The regulatory group should be stressing long-term performance, not short-term performance," said Schafer, who started managing money 22 years ago and today runs the Strong Schafer Value Fund.

The National Association of Securities Dealers announced yesterday that it has agreed to a 10-year contract with Sylvan Learning Systems Inc. under which the Columbia-based company will provide computerized testing for the association's broker certification program.The finalized contract, which was approved by NASD's board of governors yesterday, replaces a letter of intent that the association and Sylvan signed six weeks ago. The agreement will increase fivefold the number of sites where the nation's 507,000 registered brokers can take certification exams.

7/8 TC The National Association of Securities Dealers said yesterday that it has begun an investigation into a sudden jump in the price of Sylvan Learning Systems' stock price before an announcement that Sylvan had won a high-profile contract with the NASD.Stephan Beauchesne, a spokesman for NASD, said the inquiry into Tuesday morning's trading was "regular procedure" and was not prompted by the organization's involvement in the matter.Stock in the Columbia-based company surged $2.625, or 8 percent, on NASD's Nasdaq stock market in an 18-minute period less than two hours before trading was halted for the announcement.

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.

Nathan A. Chapman Jr., president of the Baltimore-based Chapman Co. brokerage, has paid a $30,000 fine to settle a complaint by a securities regulator that the company bought and sold stocks while it failed to maintain proper capital ratios in 1993 and 1994.Mr. Chapman also drew a 10-day suspension from performing financial and operational duties at the firm, the National Association of Securities Dealers' conduct committee said in its order.He neither admitted nor denied the allegations.