Edward D. Jones & Co., L.P., is a privately held, St. Louis-based brokerage firm with nearly 9,000 offices. The firm’s model is to have small offices in smaller communities and suburbs so as to better serve individual investors and small businesses. Edward D. Jones Sr. founded the firm in St. Louis in 1922, later merging it with Whittaker and Co., which was founded in 1871. The vast majority of the Edward Jones’ branch offices have only one or two “Financial Advisors” (licensed brokers). The office arrangement gives brokers significant autonomy to pursue their business, but because a licensed supervisor is rarely on premise, such an arrangement can lead to supervisory lapses.
Edward Jones Fined $75 Million for Funds Fraud
The Securities and Exchange Commission, the NASD, and the NYSE fined Edward Jones $75 million for failure to supervise and failure to adequately disclose revenue-sharing payments that it received from a group of mutual fund families that it recommended to customers. According to the SEC, Edward Jones entered into revenue-sharing arrangements with certain fund families and told investors that it promoted these funds because of the quality of the funds. Edward Jones failed to disclose that it received millions of dollars from the funds each year and reportedly provided these fund families with exclusive “shelf space” to market the funds. The NASD also charged Edward Jones with holding unlawful sales contests promoting these mutual funds. Winning brokers could choose a trip from 35 “world-class” vacation destinations. The contests rewarded airfare, five-star accommodations and activities including skiing, golfing, fine dining and tours.If you suffered investment losses, please contact us or communicate with a Dimond Kaplan & Rothstein, P.A. attorney at 888-578-6255 or jkaplan@dkrpa.com for a free case evaluation.
