WFG Investments, Inc. of Dallas, Texas submitted a Letter of Acceptance, Waiver and Consent to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales charge discounts to curtain customers’ eligible purchases of Unit investment Trusts (UITs). WFG was subject to a similar FINRA complaint in December 2014 which alleged the firm failed to supervise a representative in connection with false statements received by clients.
A UIT is a type of Investment Company that issues securities, typically called “units,” representing undivided interests in a fixed portfolio of securities. UIT units are redeemable securities that are issued for a specific term, and entitle an investor to receive his or her proportionate share of the UIT’s net assets on redemption or at termination. One way to reduce the sales fee charged on a UIT purchase is through “breakpoints” which reduce client fees based on the amount they invested.