Lincoln Investment Planning to pay $1.37 million to clients
According to the Financial Industry Regulatory Authority, Inc. (FINRA) this week, the regulator sanctioned broker-dealer Lincoln Investment Planning for neglecting to give clients discounts when they bought mutual fund A shares.
FINRA reportedly reached a settlement with Lincoln in which the firm paid $1.37 million to clients whom it overcharged between January 2011 and June 2018.
With more than 1,500 registered reps, Lincoln, for the last 7½ years reportedly disadvantaged certain retirement plan and charitable organization customers who were eligible to purchase class A shares in certain mutual funds without a front-end sales charge, according to the order.
FINRA alleges that those eligible customers were instead sold class A shares with a front-end sales charge or class B or C shares with back-end sales charges and higher ongoing fees and expenses.
According to the Letter of Acceptance, Waiver & Consent, during the relevant period, Lincoln Investment Planning did not have a supervisory system and procedures designed to ensure that eligible clients who bought mutual funds got the benefit of sales charge waivers.
After numerous firms have been sanctioned for neglecting to give the proper discounts, in February the SEC launched an initiative to waive fines against investment advisers who come forward and admit that they had been putting clients into high-fee mutual fund classes and agree to reimburse those clients.
FINRA censured Lincoln Investment Planning for the overcharges while noting it recognized the firm was cooperating in resolving the matter.
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