FINRA Orders Three Brokers To Refund $30 Million In Overcharged Mutual Fund Fees

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On July 6, 2015, the Financial Industry Regulatory Authority ordered Wells Fargo, Raymond James & Assoc. and LPL financial to refund a total of $30 million in illegal mutual fund fees collected by the brokers on retirement and charitable accounts.

The issue concerns differing classes of mutual fund shares, each with different sales charges and fees.  The different classes are available to different types of accounts, such as institutional accounts, charities and certain retirement funds.

The brokerages sold class A shares without waiving the initial sales charge, which they should have done for 50,000 qualified retirement and charitable accounts.  In some instances, the accounts were improperly sold other classes of shares that carried ongoing fees.

Wells Fargo, Raymond James and LPL paid affected customers $15 million, $8.7 million and $6.3 million, respectively.

FINRA criticized the firms for not installing proper procedures to ensure that all applicable fee waivers and discounts applied. Instead, the firms left it to the individual brokers to properly institute the share class policies, which led to predictably spotty compliance.

If you would like to learn more about this potential matter, please fill out the form on the right or contact the following attorney:

Andrei Rado, Esq.
Milberg LLP
One Pennsylvania Plaza, 49th Fl.
New York, NY 10119-0165
Phone number: (800) 320-5081

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