National Planning Corporation

National Planning Corporation (CRD #29604, Santa Monica, California) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $315,000 and required to create a list of clients who, during a specific time period, purchased $50,000 or more Class B shares in any single fund family, which shall be aggregated by household and fund family to determine if the $50,000 threshold was met, and Class C shares when aggregated by household and fund family, total $500,000 or more and involve payment of a front-end load, or $1 million or more where no frontend load was paid. The firm was also required to offer any client who made a qualifying purchase and still holds all or any portion of such shares the option of converting Class B and/or Class C shares into Class A shares in such a manner that each client is placed in substantially the same financial position that they would have been had they purchased Class A shares instead of Class B and/or Class C shares, and it may remove qualifying purchases as long as it provides NASD with quantitative proof that they could not materially benefit from having the particular transaction converted toClass A shares. Further, the firm was required to file a report with NASD identifying the qualifying purchases, transactions removed from the list of qualifying purchases, transactions for which clients received a letter offering conversion, transactions for which clients received a cash payment, how the firm created and staffed a response center to field and respond to client inquiries, each client who had a qualifying purchase and contacted the firm concerning remediation, and transactions for which the client accepted the firm's offer of conversion and/or cash. The firm was also required to retain an independent examiner to examine the firm's performance of its obligations and compliance with these undertakings.

Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that, in connection with its recommendations that clients purchase Class B and Class C shares, it did not consider, or did not adequately disclose at the point of sale on a consistent basis, that an equal investment in Class A shares would generally have been more advantageous for certain clients. The findings stated that the firm's supervisory and compliance policies and procedures were not reasonably established, maintained and/or enforced so that the firm, at the point of each sale, provided adequate disclosure of, or consideration to, on a consistent basis, the benefits of the various mutual fund share classes as they applied to individual clients. (NASD Case #E0220030119-01)

Did you lose money investing with National Planning Corporation?

Contact Information