The NASD (formerly the
National Association of Securities Dealers) has fined New York
City-based financial firm Merrill Lynch, Pierce, Fenner & Smith
Inc. $5 million for running impermissible sales incentive contests,
failing to supervise advisers and other violations in connection
with the operation of its financial call centers in Hopewell, N.J.,
and Jacksonville, Fla.
The firm also was barred from staging any incentive sales
contests for call center personnel for three years.
The regulatory body found that from 2001 to 2004, Merrill Lynch
offered and awarded various forms of noncash compensation,
including tickets to rock concerts, sporting events and dinners, to
call center personnel based solely on the sale of the firm’s
proprietary mutual funds, which is a violation of NASD policy.