Bank of America to pay $7.23 million in Restitution to Clients
FINRA Sanctions Bank of America for Overcharging Customers on Mutual Funds
According to the Financial Industry Regulatory Authority (FINRA) this week, Bank of America Corp. agreed to pay $7.23 million in restitution and interest to settle the regulator’s allegations that it overcharged customers on mutual funds.
FINRA said that customers holding 13,328 accounts were allegedly charged unnecessary sales fees and charges from April 2011 to April 2017 at the bank’s Merrill Lynch unit.
According to FINRA , some eligible customers purportedly failed to receive waivers of front-end sales charges when they bought fund shares after previously selling shares from the same fund family, while others failed to receive rebates of back-end sales fees.
Merrill Lynch did not admit or deny wrongdoing. FINRA noted it recognized the firm was cooperating in resolving the matter including its hiring an outside consultant to find harmed customers and promptly paying restitution.
In 2014, FINRA ordered Merrill Lynch to pay an $8 million fine and $24.4 million in restitution to settle charges it failed to waive mutual fund sales charges and fees on more than 47,000 accounts for retirement plans and charitable entities.
After numerous firms have been sanctioned for neglecting to give the proper discounts, in 2018 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.
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