Hilliard Lyons agreed to pay back nearly $1 million to its clients for failing to waive sales fees on mutual funds for eligible institutional clients, according to FINRA.
After an internal investigation, Hilliard Lyons determined that its advisers had been selling retirement plans and charitable organizations mutual fund shares that carried front- or back-end sales charges or recurring expenses and fees.
In December 2015, Hilliard approached FINRA with its findings, admitting to the regulator that, over a six-year period, its advisers overcharged an estimated 1,060 clients around $716,000 in sales charges that should have been waived. The firm has accepted a censure from FINRA, committed to improve its supervisory procedures and adopted a written plan to identify clients that were overcharged and pay out more than $812,000 in restitution, accounting for the overcharges and interest.
Those clients, Hilliard concluded, should have received waivers of the sales charges associated with Class A shares of the mutual funds, but were instead sold Class A shares that carried the fees or Class B or C shares with back-end and higher ongoing expenses.
With the settlement, Hilliard Lyons joins the list of brokerage houses that FINRA has hit for failing to waiver fees on Class A mutual fund shares. That list includes Baird, Merrill Lynch, UBS, and Edward Jones.
According to a spokesperson, Hilliard plans to reimburse all clients that were affected.
The foregoing information, which is publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.