In August 2013, FINRA announced that it has fined Delray Beach, Florida brokerage firm Hunter Scott Financial, LLC for charging customers an improper “handling” fee, in addition to commissions on securities trades. According to FINRA, the handling fee was fixed at $50 per transaction and a substantial portion was not attributable to any specific cost or expense incurred by the firm in executing or “handling” the trade, or determined by any formula applicable to all customers. Although the brokerage firm represented that the fee was for “handling,” FINRA determined that a substantial portion of the fee actually served as an improper source of additional transaction-based remuneration or revenue to the firm. FINRA also found that by characterizing the charge as a “handling” fee on trade confirmations, Hunter Scott understated the amount of the total commissions that the firm charged and misstated the purpose of the handling fee.
