Delaware AG Jennings Joins $17 million Settlement with Edward Jones
Following a multi-state investigation into supervisory failures with respect to mutual fund shares, The Investor Protection Unit of the Delaware Department of Justice has joined a $17 million settlement with Edward D. Jones & Co., L.P. (“Edward Jones”). The four-year investigation looked into Edward Jones’ supervision of customers moving from brokerage to advisory accounts. The investigation found that Edward Jones charged front-load commissions for investments in Class A mutual fund shares in situations where the customer sold or moved the mutual fund shares sooner than originally anticipated. The states found gaps in Edward Jones’s supervisory procedures in this respect.
Additional Information from the Delaware Attorney General’s Office:
“We expect investment firms operating in Delaware to follow our securities laws and to appropriately supervise their agents,” said Attorney General Kathy Jennings. “Firms that offer both brokerage and investment advisory services should ensure that customers receive services at an appropriate price.”
The four-year investigation looked into Edward Jones’ supervision of customers moving from brokerage to advisory accounts. The move was prompted by the 2016 U.S. Department of Labor (DOL) Fiduciary Rule that would make investment advice to retirement accounts subject to a fiduciary standard of care.
The investigation found that Edward Jones charged front-load commissions for investments in Class A mutual fund shares in situations where the customer sold or moved the mutual fund shares sooner than originally anticipated. The states found gaps in Edward Jones’s supervisory procedures in this respect.
As part of the settlement, Edward Jones will pay Delaware’s IPU 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.
Investors with concerns about the fees they are charged by financial professionals may submit complaints to the Investor Protection Unit by filling out the complaint form at https://attorneygeneral.
