Key said in a Web site statement that the NASD action stems from alleged supervisory failures at McDonald’s Chicago office, which was closed in December 2003.The company said that it will respond to the NASD’s preliminary determination to take action against McDonald, but that it could not predict what future action the unit might have to take in response to an NASD enforcement proceeding.
McDonald has already received subpoenas from the
SEC and inquiries from the NASD and the State of New York
Attorney General seeking documents and information as
part of their investigations into trading activity
involving the mutual fund, brokerage and annuity
businesses, according to news reports.
In a regulatory filing, Key asserted that McDonald “has responded to the various regulatory authorities and has been cooperating fully with their inquiries and investigation.”
“McDonald has also conducted an internal review of its procedures and processes for executing customer orders for mutual fund share transactions,” Key said in the filing. “That review revealed no systemic late trading arrangements, although it did reveal four isolated instances of late trading from among the mutual fund transactions made during the relevant review period. None of those late trading transactions involved Key’s Victory Funds.”