Finra Penalizes Firms for Failing to Waive Mutual Fund Fees
28 October 2015 - 2:50AM
Dow Jones News
Wall Street's self-regulator ordered five firms to pay more than
$18 million in restitution to charitable organizations and
retirement accounts that were allegedly overcharged on mutual-fund
sales.
Edward D. Jones & Co. L.P., Stifel Nicolaus & Co.,
Janney Montgomery Scott LLC, AXA Advisors LLC, and Stephens Inc.
failed to waive mutual fund sales charges for eligible
retirement-plan customers and charitable organizations, the
Financial Industry Regulatory Authority said Tuesday. The
sanctioned firms didn't confirm or deny the charges.
Finra noted that even though the firms offered waivers of fees
to charitable and retirement plan accounts, the agency alleged
that, at least since July 2009, these adjustments weren't made on
certain occasions when Class A shares were offered. Typically,
Class A shares have lower fees than Class B and C shares, but
charge customers an initial sales charge, Finra said in a news
release announcing the settlement.
Edward D. Jones was ordered to pay $13.5 million in restitution,
the heftiest penalty of the five firms sanctioned. Stifel Nicolaus
will have to pay $2.9 million, while Janney Montgomery was ordered
to pay $1.2 million. AXA Advisors and Stephens will pay $600,000
and $150,000, respectively.
Finra also said the accused firms allegedly failed to adequately
supervise the same of mutual funds that offered sales charge
waivers.
In July, the wealth-management units of Wells Fargo & Co.,
Raymond James Financial Inc. and LPL Financial Holdings Inc. were
ordered to pay more than $30 million in restitution for similarly
failing to waive mutual fund sales charges for retirement accounts
and charities.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 27, 2015 11:35 ET (15:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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