National Planning Corp. Inc., a Santa Monica-based broker-dealer, has been fined $1.3 million by the National Association of Securities Dealers for receiving improper payments to push certain mutual funds to investors, the NASD announced Monday.


National Planning also was cited for conducting an improper sales contest. The violations took place between 2001 and 2003.


National Planning Holdings operates three other subsidiaries that also were fined by the NASD: IFC Holdings Inc., SII Investments Inc. and Investment Centers of America Inc. All four face a combined $3.85 million in sanctions and are all affiliates of Jackson National Life Insurance, based in Lansing, Mich.


The self-regulating NASD announced a total of $7.7 million in settlements and sanctions against the National Planning units and other firms for allegedly violating rules that prohibit selling mutual funds in exchange for receiving payments or commissions.


National Planning Corp., a subsidiary of National Planning Holdings Inc., said in a statement that it supported the NASD actions and continues "to focus on transparent and comprehensive enforcement of all compliance regulations."


The NASD and the Securities and Exchange Commission have spent the last year cracking down on companies that engage in "directed brokerage violations" that is, receiving payments in exchange for selling certain mutual funds.


NASD said the companies violated the "anti-reciprocal rule" in which it is deemed a conflict of interest for any firm to either recommend mutual funds or create a list of preferred funds in exchange for receiving brokerage commissions. The commissions typically are paid for by fund shareholders, not the mutual fund company.

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