The Tennessee Department of Commerce & Insurance (TDCI), a member of the North American Securities Administrators Association (NASAA), has participated in a $17 million settlement with Edward D. Jones & Co., L.P. (Edward Jones). The settlement follows a four-year investigation into Edward Jones’s supervision of customers paying front-load commissions for Class A mutual fund shares and subsequently moving brokerage assets into fee-based investment advisory accounts.
The investigation, conducted by a working group of 14 state securities regulators, evaluated Edward Jones’s supervision practices, particularly in light of the 2016 U.S. Department of Labor (DOL) Fiduciary Rule. This rule mandates that investment advice for retirement accounts adhere to a fiduciary standard of care. The investigation revealed that Edward Jones charged front-load commissions in cases where mutual fund shares were sold or transferred earlier than anticipated, highlighting deficiencies in the company’s supervisory procedures.
Latest TN News
As part of the settlement, Edward Jones will pay an administrative fine of approximately $320,000 to each of the 50 states, Washington, D.C., the U.S. Virgin Islands, and Puerto Rico. In considering the resolution, the states noted the positive performance of investment advisory accounts compared to brokerage accounts.
Elizabeth Bowling, TDCI Assistant Commissioner for Securities, emphasized the commitment to protecting investors and ensuring compliance with securities laws in Tennessee. She acknowledged Edward Jones’s cooperation throughout the investigation and settlement process, urging firms offering both brokerage and investment advisory services to ensure that customers receive desired services at appropriate prices.
For more information, investors can contact TDCI’s Securities Division through their website tn.gov/securities or call 800-863-9117.
Source: Read Original Release