SC joining $17M settlement against Edwards Jones, attorney general says

COLUMBIA, S.C. (WCSC) – The state of South Carolina will receive a portion of a $17 million settlement with the investment group Edward Jones after a four-year multi-state investigation.
South Carolina Attorney General Alan Wilson’s office made the announcement Tuesday morning.
“In partnership with (North American Securities Administrators Association) and other state securities regulators, we will continue to protect Main Street investors and ensure that companies operating in South Carolina follow our securities laws,” Wilson said in a statement.
Fourteen state securities regulators investigated Edward D. Jones & Company, L.P.‘s supervision of customers moving from brokerage to advisory accounts following the 2016 U.S. Department of Labor Fiduciary Rule that would make investment advice to retirement accounts subject to a fiduciary standard of care, a release from Wilson’s office states.
“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 release states.
The investigation also uncovered gaps in Edward Jones’ supervisory procedures, Wilson’s office said.
As part of the settlement, the company 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, the release states.
“We appreciate Edward Jones’s ongoing cooperation throughout this investigation and settlement process. Firms that offer both brokerage and investment advisory services should be mindful that customers are receiving the services the customer wants at an appropriate price,” Wilson said.
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