SACRAMENTO — The California Department of Financial Protection and Innovation (DFPI) announced it has joined a $17 million multi-state settlement with investment adviser and broker-dealer, Edward D. Jones & Co., L.P. (Edward Jones).
The settlement is the outcome of a four-year investigation that was led by a working group of 14 state securities regulators that probed Edward Jones’s movement of clients from brokerage to advisory accounts. The investigation found that Edward Jones charged front-load commissions on investments for some clients who sold or moved their mutual fund shares sooner than originally anticipated. The states found gaps in Edward Jones’s supervisory procedures related to this activity.
“This agreement reflects the ongoing efforts by state securities regulators to protect investors and make sure that they are treated fairly by financial services firms. We are grateful for the nationwide collaboration in this settlement,” said Acting DFPI Commissioner KC Mohseni.
Edward Jones will pay each of the 50 states, Washington, D.C., the U.S. Virgin Islands, and Puerto Rico, an administrative fine of approximately $320,000. In evaluating the supervisory failures and determining the appropriate resolution, the states considered certain facts such as the positive performance of the investment advisory accounts as compared to the brokerage accounts.
Edward Jones is an investment adviser registered with the SEC and a broker-dealer registered in California since January 1, 1971, with 802 branch offices in California.
The DFPI expects any lender, person offering securities, or other financial services provider that operates in California to comply with our financial laws. Investors may file a complaint directly with the DFPI if a company is suspected of using unlawful, unfair, deceptive, or abusive practice online (dfpi.ca.gov/file-a-complaint) or call toll-free at (866) 275-2677.
About DFPI
The California Department of Financial Protection and Innovation (DFPI) protects consumers, regulates financial services, and fosters responsible innovation. The DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.