Five More Firms To Pay $18M For Overcharges

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Five More Firms To Pay $18M For Overcharges

FINRA has ordered five broker-dealers to reimburse clients a sum of $18.4 million for charging them improper fees on mutual funds. Edward Jones will pay $13.5 million, Stifel Nicolaus & Co., $2.9 million, Janney Montgomery Scott, $1.2 million, Axa Advisors, $600,000, and Stephens Inc., $150,000.

FINRA found that as far back as July 2009 the mutual funds these firms made available through their retail platforms failed to offer charities and retirement accounts waivers that they were due for some upfront sales charges on Class A shares. Other times, the firms placed investors into incorrect share classes, which subjected them to charges they should not have been assessed.

Earlier this year, Wells Fargo Advisors, Raymond James, and LPL Financial were forced to pay a total of $30 million for similar violations.

“These actions are further evidence of our commitment to pursue substantial restitution for adversely affected mutual fund investors who were not afforded the full benefit of available sales charge waivers,” said Brad Bennett, FINRA’s executive vice president and enforcement chief.

FINRA found that the five firms that were part of this week’s announcement also “unreasonably relied on financial advisers to waive charges” for these accounts without training them or providing them with the correct information on how to do so.

Edward Jones stated that it has corrected the issue and cooperated with FINRA’s investigation. According to spokesman John Boul, “Edward Jones is simplifying the mutual funds offerings for some firm-held retirement accounts to help ensure this problem doesn’t occur in the future.”

Janney Montgomery Scott said that FINRA recognized its “cooperation to identify the issue proactively” and modification of its internal processes.

Axa Advisors stated that is tries to meet the industry’s best practices and regulatory requirements. “We have fully cooperated with the FINRA investigation into this industry-wide issue and are pleased to have reached a resolution with FINRA,” said Axa.

Stephens and Stifel Nicolaus did not comment.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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