The National Association of Securities Dealers fined Sanford C. Bernstein & Co. and its analyst Brad Hintz a total of $550,000 for violating conflict-of-interest rules.
The NASD said Wednesday that Mr. Hintz sold shares of Morgan Stanley and Lehman Brothers in January 2005, when Sanford Bernstein had favorable ratings on them. That violated rules against trading contrary to an analyst's recommendation, the NASD said.
The firm was fined $350,000, and Mr. Hintz $200,000. They consented to the fines but did not admit wrongdoing.
Mr. Hintz, a well-known bank analyst, is a former chief financial officer of Lehman Brothers and a former treasurer of Morgan Stanley. The NASD said he held a "substantial" amount of stock in Lehman and options to purchase stock in Morgan Stanley.
At his request Sanford Bernstein sought an exemption in 2004 from the rules prohibiting the sales, the NASD said. The firm that Mr. Hintz faced a hardship from the rules and should be allowed to sell his holdings.
