Five brokerage firms were ordered to reimburse clients more than $18 million for overcharges associated with certain mutual funds. The Financial Industry Regulatory Authority found that the firms failed to waive mutual fund sales charges for eligible charitable organizations and retirement accounts.
Without admitting or denying the allegations the firms agreed to the following sanctions:
Edward D. Jones & Co., L.P. – $13.5 million in restitution
Stifel Nicolaus & Company, Inc. – $2.9 million in restitution
Janney Montgomery Scott, LLC – $1.2 million in restitution
AXA Advisors, LLC – $600,000 in restitution
Stephens Inc. – $150,000 in restitution
Mutual funds typically offer lower sales charge on Class A shares, and often waive the upfront sales charges for certain types of retirement and charitable accounts. Since as early as July 2009, FINRA found that Edward Jones, Stifel Nicolaus, Janney Montgomery, AXA and Stephens did not waive the charges for eligible accounts. As a result more than 25,000 accounts were affected.
In addition FINRA found that the firms failed to properly supervise waivers offered by certain mutual funds and “unreasonably relied on financial advisors to waive charges for retirement and eligible charitable organization accounts, without providing them with critical information and training.”
The foregoing information, which is publicly available here, is being provided by The White Law Group.
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