FINRA ordered payment of over $18 million in restitution to customers overcharged for mutual fund transactions at five member firms: Edward D. Jones & Co., LP; Stifel Nicolaus & Company, Inc.; Janney Montgomery Scott, LLC; AXA Advisors, LLC; and Stephens Inc.
The settlement orders follow a Summer 2015 action in which FINRA ordered Wells Fargo Advisors, Raymond James, and LPL Financial to pay restitution for a similar reason: failing to waive mutual fund sales charges for charity and retirement accounts.
This brings the Summer-Fall 2015 disciplinary total to 10 firms ordered to pay over 75,000 eligible retirement accounts and charities a total of $55 million in restitution.
According to FINRA's announcement, the aforementioned firms failed to offer eligible retirement account and charitable organization customers the opportunity to enjoy sales charge waivers that are typically afforded to Class A shares for certain retirement and charitable accounts.
Investigators concluded that as a result of the firms' collective failure to waive eligible sales charges, over 25,000 eligible retirement and charitable accounts overpaid sales fees, either directly via Class A mutual fund shares' sales charges or by purchasing Class B and/or C shares instead of A because these customers were improperly told the Class B and C fees would be less expensive than purchasing Class A shares with sales charges.
Further investigation determined that the firms' failure to adequately supervise the sale of sales charge waiver-eligible mutual funds and failure to properly train and provide critical information to financial advisors engaged in such transactions were contributing factors in the retirement/charitable account customers' overpayment of sales charges.
If you have invested with any broker or financial adviser whose failure to inform you of Class A mutual fund sales charge waivers, or any other fee discounts applicable to your retirement or similar investment account has proven harmful to your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News Release: FINRA Orders an Additional Five Firms to Pay $18 Million in Restitution to Charities and Retirement Accounts Overcharged for Mutual Funds (FINRA)