Reuters reports that securities regulators are investigating more than two dozen JP Morgan Chase brokers in an effort to ascertain whether they engaged in any improper mutual funds sales in a bid to generate increased commissions.
The investigation is part of a broad sweep of the mutual funds industry by regulator NASD. NASD is trying to clamp down on unsavoury practices, which include the sale of mutual funds to clients on the basis of the commission generated to a firm or broker, rather than because a particular investment represents best value to the investor.
The brokers under investigation are said to all work in branches of the bank in the eastern United States. The New York Times earlier reported that the activities of about a dozen of the broker's supervisors are also under examination.
JP Morgan is said not to have commented on the story so far.