Edward D. Jones & Co and four other brokerages agreed to reimburse a combined $18.4 million to customers to settle U.S. regulatory charges of failing to waive mutual fund sales charges on more than 25,000 accounts belonging to charities and retirees.
The settlements with Edward Jones, Stifel Financial Corp's Stifel Nicolaus & Co, Janney Montgomery Scott LLC, AXA SA's AXA Advisors LLC and Stephens Inc were announced on Tuesday by the Financial Industry Regulatory Authority.
Since July 2009, FINRA said, the brokerages improperly collected upfront sales charges on Class A shares, unnecessarily sold Class B or Class C shares that carried higher ongoing fees, and failed to properly train and oversee financial advisers to ensure charges were waived.
Edward Jones agreed to make $13.5 million in restitution on roughly 18,000 accounts. Restitution will total about $2.95 million from Stifel, $1.16 million from Janney, $602,000 from AXA and $150,000 from Stephens, settlement papers showed. None of the brokerages admitted or denied wrongdoing.
Many mutual fund companies offer shares in multiple classes, some with upfront or back-end sales charges known as "loads," and others with ongoing marketing fees or elevated expenses.
Edward Jones spokesman John Boul said the St. Louis-based firm cooperated fully with FINRA and is simplifying its mutual fund offerings to avoid a recurrence.
In July, FINRA reached similar settlements with units of Wells Fargo & Co, Raymond James Financial Inc and LPL Financial Holdings Inc. It said a combined $55 million in restitution will be paid on more than 75,000 accounts from all of the settlements.