Capital Research's American Funds Fined

The panel rejected NASD enforcement division arguments that AFD engaged in a pattern of misconduct over a period of years that was intentional or at least reckless, noting that AFD's use of directed brokerage was consistent with practices that had arisen in the mutual fund industry over a number of years.

"Unlike its competitors, AFD acted voluntarily to change those practices when regulators began expressing those concerns," the NASD said in a statement. The panel also rejected an original call for the fine to equal the amount of the alleged directed brokerage payments.

The NASD statement added that the trades were placed and the commissions were actually paid by Capital Research -- which is not subject to NASD regulation.