Evergreen Settles With NASD for $4.2M

Evergreen Investments, a unit of Wachovia Corporation, agreed to pay a $4.2 million civil penalty to settle National Association of Securities Dealers (NASD) allegations that it adopted improper mutual fund sales methods.
Reuters reports the NASD investigation, which lasted more than a year, probed whether Evergreen’s affiliated mutual fund broker-dealer, Evergreen Investment Services, made inappropriate, non-cash compensation to brokers for sales of Evergreen funds between 2001 and 2003. According to the regulator, in exchange for receiving better placement in front of customers and on Web sites and receiving better treatment from Wachovia’s financial advisers, Evergreen directed commisions to Wachovia’s brokerage unit. NASD also investigated if Evergreen sent more business during that period to some broker-dealers who were promoting its funds.

Evergreen Chief Executive Dennis Ferro said in a statement no shareholders or mutual funds will be affected monetarily or in any other way as a result of the settlement. He also said the company believes no fund or shareholder was adversely affected by the conduct NASD was investigating. Evergreen did not admit to or deny any wrongdoing.