FINRA Orders $30 Million in Restitution from Wells Fargo, Raymond James & LPL Financial

Earlier this month the Financial Industry Regulatory Authority (FINRA) ordered three of the country’s largest brokerages to pay more than $30 million combined in restitution to clients who were overcharged fees in certain mutual fund sales.

According to FINRA, the wealth-management units of Wells Fargo, Raymond James Financial and LPL Financial Holdings failed to waive mutual-fund sales fees for certain retirement-plan customers and charitable organizations. Wells Fargo has agreed to pay roughly $15 million, while Raymond James and LPL will pay $8.7 million and $6.3 million, respectively.

As a matter of course, mutual fund companies traditionally provide sales-charge waivers for retirement plans in order to comply with ERISA rules designed to avoid conflicts of interest. In these cases, all three brokerages self-reported the issue to FINRA, thus avoiding fines in addition to the agreed upon restitution.

FINRA’s enforcement chief Brad Bennett stated that “the firms unreasonably relied on financial advisors to waive charges for retirement and eligible charitable organization accounts, without providing them critical information and training.” Spokespersons for Raymond James and LPL Financial have stated that they have already begun the restitution process.

This restitution order follows a similar order issued against Merrill Lynch last June, when that brokerage firm was ordered to pay $24.4 million in restitution and an additional $8 million fine to settle charges that it improperly charged mutual fund sales fees.

Contact Us Today

If you were charged sales fees in connection with mutual fund purchases as part of a retirement plan or as a part of a charitable organization, contact the attorneys at Dimond Kaplan & Rothstein, P.A. You may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.

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