$5.4 million paid by Wachovia to disserved consumers

Two Wachovia Corp. units were fined by the FINRA more than $4.5 million for their selling mutual funds and unit investment trusts in breach of the respective regulations. Usually a unit investment trust issues redeemable securities, such as a mutual fund. Then the trust will repurchase an investor’s securities at the investor’s request, at their approximate net asset value.

A $4.41 million fine was charged on Wachovia Securities for its not providing investors with sales-charge rebates while at the same time not ensuring that investors received the benefit of net asset value transfer programs. Additionally it was also fined for breaching the regulation related to the sale of Class B and C mutual fund shares.

A $150,500 fine was charged on Wachovia Securities Financial Network for its violating the regulations related to improper sales of Class B share. According to the competent sources the fines reflect the $4 million-plus in additional commissions the firms received by selling Class B and C shares rather than Class A shares.

The allegations were not admitted or denied by the units. Wachovia reimbursed its affected customers with $5.4 million.