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Washington Square Securities, Inc.

Washington Square Securities, Inc. (CRD #2882, Des Moines, Iowa) receiveda censure and fine of $50,000. The firm was also ordered to pay $48,955.35 in partial restitution to public customers who purchased Class B shares. According to the findings, the firm, acting through its agents, effected purchases of large positions of Class B mutual fund shares in firm customer accounts. The regulators also found that the purchases were unsuitable because they deprived the customers of the benefit of sales charge breakpoints that they would have received had they purchased Class A shares, including those acquired through letters of intent or rights of accumulation. Additionally, the regulators also found that the purchases deprived the customers of lower 12b-1 fees that they would have received if they had purchased Class A shares, while also exposing the customers to potentially higher contingent deferred sales charges upon liquidation and to the costs of purchasing Class B shares possibly exceeding the costs of purchase of Class A shares. The firm accepted the fine and censure but did not admit or deny the accusations. (NASD Case #C04040015)

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