Jul 17, 2017

Legend Equities to Pay More Than $2.3 Million in Restitution for Mutual Fund Overcharges

Legend Equities Corporation has agreed to pay more than $2.3 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 January 1, 2017, Legend Equities 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, Legend Equities 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, Legend Equities 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, Legend Equities was censured and agreed to pay restitution to eligible customers who were overcharged of an estimated $2,300,188.00, the amount eligible customers were overcharged, inclusive of interest. 

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Feb 3, 2017

MML Investors to Pay More Than $1.8 Million in Restitution for Mutual Fund Overcharges

MML Investors Services, LLC (MML Investors) has agreed to pay more than $1.8 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 September 20, 2016, MML Investors 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. MML Investors has more than 1,100 branch offices and more than 5,300 registered representatives.  According to the Letter of Acceptance, Waiver and Consent (AWC) submitted to FINRA, MML Investors 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, MML Investors 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, MML Investors consented to the sanctions, was censured, and agreed to pay restitution to eligible customers who were overcharged an estimated $1,864,167.77.  This amount includes the approximately $1.5 million in mutual fund overcharges plus interest.

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Sep 23, 2016

Securities America to Pay More Than $1.5 Million in Restitution for Mutual Fund Overcharges

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.

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