U.S. securities regulator NASD announced Wednesday that it has censured and fined a firm for unsuitable sales of deferred sales charge funds. It also released an investor alert on the issue.

The firm, McLaughlin, Piven, Vogel Securities Inc. and its chairman, were fined a total of US$100,000 for supervisory violations and unsuitable sales of Class B shares of mutual funds, and directed restitution of approximately US$90,000 to customers.

Additionally, NASD suspended MPV’s chairman, James McLaughlin, for a period of 30 business days in his capacity as a principal.

Today’s action is part of a larger, ongoing focus of NASD on the sale of Class B mutual fund shares. In the last two years NASD has brought more than half a dozen significant enforcement cases involving sales violations of Class B shares.

Class A shares typically involve a front-end sales charge, but these fund shares also typically incur lower ongoing charges and there is no contingent deferred sales charge upon the sale of the shares. Class B mutual fund shares do not incur a front-end sales charge, but are subject to higher ongoing charges and a contingent deferred sales charge upon the sale of shares.

NASD also released an alert to investors warning them about the expenses involved in purchasing Class B mutual fund shares and how to determine which share class may be appropriate.

“Today’s enforcement action puts brokers on notice that investors must be sold an appropriate class of mutual fund, and our Investor Alert gives investors the tools to educate themselves about the costs involved when purchasing Class B shares,” said Mary Schapiro, NASD vice chairman and president of Regulatory Policy and Oversight. “The information in today’s alert allows investors to better protect themselves when purchasing mutual funds.”

In settling this matter, MPV and McLaughlin neither admitted nor denied the allegations, but consented to the entry of findings.