https://www.retirementplanningscottsdale.com/2019/03/14/anil-vazirani-states-wells-fargo-and-79-other-firms-paying-millions-to-clients-overcharged-for-mutual-funds/ Anil Vazirani states that Wells Fargo, and 79 other firms re-paying millions to clients they overcharged for mutual funds. Per an article in Financial Planning by Ann Marsh and Tobias Salinger on March 11th, 2019, states that in a black eye on the brokerage-affiliated RIA industry, 79 firms have voluntarily agreed to repay $125 million to clients they overcharged by putting them in high-priced mutual fund shares without adequate disclosure.
The investment advisory divisions of Wells Fargo, RBC, LPL Financial, Raymond James and Kestra Financial collectively will pay $51.5 million, or more than 40% of the total. Wells Fargo, which is scheduled to testify before Congress this week about a long list of admitted client abuses, leads the pack at $17.4 million, following by RBC Capital at $11.7 million.
The firms voluntarily came forth after the SEC offered them the opportunity last year to self-report when the firms had sold clients high-priced mutual fund shares when lower-cost alternatives were available. The cases focus on mutual fund 12-b1 fees, known as trails. The SEC’s program resembles tax amnesties offered by the IRS to tax scofflaws. By coming forward, the firms avoided fines from the commission.
Wells Fargo “violated … the Advisers Act, which makes it unlawful for any investment adviser, directly or indirectly, to ‘engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client,'” the SEC wrote in its case against Wells. The language resembles that of the other firms’ cases.
The firms settled without admitting or denying the commission’s findings.
Read more: https://www.financial-planning.com/news/sec-share-class-cases-of-125m-follow-self-reporting-program
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