Attorney General Alan Wilson joins in $17 million settlement with Edward Jones

(COLUMBIA, S.C.) – Attorney General Alan Wilson announced today that the Securities Division of the Attorney General’s Office (the “Securities Division”), a member of the North American Securities Administrators Association (“NASAA”), has joined a $17 million settlement with Edward D. Jones & Co., L.P. (“Edward Jones”). The settlement resulted from a four-year multi-state investigation, led by a working group of 14 state securities regulators, that looked into Edward Jones’ supervision of customers moving from brokerage to advisory accounts in light of the 2016 U.S. Department of Labor 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. Moreover, the investigation uncovered gaps in Edward Jones’ supervisory procedures in this respect.

As part of the settlement, Edward Jones 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.

“In partnership with NASAA 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,” said Attorney General Wilson. “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.”

The Securities Division can be reached by calling 803-734-9916 or by email to [email protected].  Investors can submit a complaint or learn more about the Securities Division by visiting the Attorney General’s Office website at https://www.scag.gov/inside-the-office/legal-services-division/securities/.