Five broker-dealers in the Cetera Financial Group network recently agreed
to a $3.3 million settlement with the Financial Industry Regulatory Authority
(FINRA) over their failure to supervise the application of mutual fund
sales charge waivers to eligible clients at charitable organizations and
in retirement plans.
The settlements cover the amount the broker-dealers overcharged their clients,
plus interest. According to FINRA, the broker-dealers overcharged their
clients between July of 2009 and July of 2017. Each broker neither admitted
nor denied the charges as part of the settlement.
According to FINRA, all five broker-dealers,
“disadvantaged certain retirement plan and charitable organization
customers that were eligible to purchase A shares in certain mutual funds
without a front-end sales charge… These 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."
FINRA announced that it was increasing its focus on mutual funds earlier
when they requested information and documents from broker-dealers related to reimbursements or waivers for mutual fund
sales charges that were available to certain investors.
According to FINRA, the firms these broker-dealers worked for,
"failed to reasonably supervise the application of sales charge waivers
to eligible mutual fund sales… The firm relied on its financial
advisers to determine the applicability of sale charge waivers, but failed
to maintain adequate written policies or procedures to assist financial
advisers in making this determination."
At Meyer Wilson, our investment fraud lawyers have dedicated their careers
to providing victims of scams and fraud with the experienced representation
they need to secure the compensation they deserve. Contact us today to
let us know about your current situation by
filling out our online form, or by calling us at one of our office locations.