American Express Unit Pays $350,000 NASD Fine
American Express Financial Advisors, the financial planning arm of American Express (AXP), is paying a $350,000 fine to settle allegations that its employees used improper sales practices in peddling variable annuities and life-insurance policies.
The NASD, formerly the National Association of Securities Dealers, fined and censured American Express for violations that occurred over a 30-month period ending in 2000. Regulators contend that the firm's employees "did not adequately explain" to customers the benefits or limitations of a variable annuity and how it differs from an investment in a mutual fund.
A variable annuity, a financial instrument that makes periodic payments to a customer during his or her lifetime, is one of the life-insurance industry's staple products. One downside of variable annuities is that they sometimes include high fees and commissions for the brokers that are selling them.
American Express, in paying the fine, neither admitted nor denied the allegation -- something that's customary in settling regulatory inquiries.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV