Three firms were ordered by the Financial Industry Regulatory Authority (FINRA) to pay more than $1 million in fines and restitution for failure to give certain clients discounts on large purchases of unit investment trusts, or UITs.
According to Investment News, Next Financial Group was fined $125,000 and ordered to pay restitution of $216,000; Key Investment Services was fined $100,000 and ordered to pay restitution of $100,000; and Stephens Inc was fined $235,000 and ordered to pay restitution of $459,000.
A Unit Investment Trust (UIT) is an unmanaged diversified portfolio of securities, generally made up of stocks and bonds or a combination of both, that is sold in “units” and is held for a specific length of time. UTIs are redeemable securities that are designed to provided dividend income to investors.
Without admitting or denying the findings, the three firms consented to FINRA’s sanctions and to the entry of findings that it failed to identify and apply sales charge discounts to certain customers’ eligible purchases of UITs resulting in customers paying excessive sales charges.
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