NASD Fines Citigroup, Merrill and Morgan Stanley for Arbitration Abuse

The NASD imposed a $250,000 fine against each of the three firms, fining that they failed to comply with discovery obligations in 20 customer arbitrations during the period 2003 through 2004, even after panels had ordered them to produce documents and information.

Each firm must implement written procedures to ensure that senior officers will review and correct future discovery violations that lead to sanctions.

More details should follow as to the restitution fund and how investors can participate.

Source: NASD News Release, July 19, 2004