Securities America, Inc. has agreed to pay more than $1.5 million in restitution to customers who were overcharged in certain mutual fund purchases. According to the Financial Industry Regulatory Authority (FINRA), between July 1, 1009 and July 1, 2015, Securities America disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares of certain mutual funds without a front-end sales charge. The customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.
According to the Letter of Acceptance, Waiver and Consent (AWC) submitted to FINRA, Securities America failed to reasonably supervise the application of the sales charge waivers to the eligible mutual fund sales, relying on its financial advisors to determine the applicability of sales charge waivers. Further, Securities America allegedly failed to adequately notify and train its financial advisors regarding the availability of mutual fund sales charge waivers for eligible customers. Without admitting or denying the findings, Securities America consented to the sanctions, was censured, and agreed to pay restitution to eligible customers who were overcharged of an estimated $1,541,419. This amount includes the approximately $1.3 million in mutual fund overcharges plus interest.
In order to protect customers, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. These rules require supervisors to monitor firm activities to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers do not establish and implement these protective measures, they may be held liable to account holders for damages stemming from a lack of supervision. As a result, investors who have paid excess fees, commissions, or unnecessary front or back-end mutual fund charges can bring forth claims to recover damages against broker-dealers, like Securities America, which have a duty to oversee its registered representatives in order to protect their customers’ interests.
Have you paid excess fees, commissions, or other unnecessary front or back-end charges in your Securities America or other investment account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Securities America stockbrokers for unsuitable recommendations, misrepresentations, and/or other types of stockbroker misconduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at email@example.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.