Brokerage Firm Alert: Our Investment Fraud Attorneys Are Investigating Edward Jones
Did You Lose Money Because of Edward Jones? Are You Aware of Complaints and Fines Against Edward Jones?
Updated on: December 30, 2023
Edward Jones (“Edward Jones”) (CRD # 250) is a broker-dealer and has been the subject of at least seventy-six (76) complaints filed by regulatory organizations like FINRA and many more by investors like yourself. At Patil Law, we have investigated Edward Jones, its regulatory complaints and fines, and its customer complaints. If you’ve invested your hard-earned money with Edward Jones, you should be very concerned about any regulatory actions, regulatory fines, or customer complaints against your brokerage firm.
Our team of attorneys specialize in representing investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. As an investor, you may be entitled to compensation for losses accrued due to mismanagement of your investments.
If you believe you have a claim against Edward Jones, you should strongly consider hiring an investment fraud lawyer and not wait until it’s too late to file a claim. Reach out to our legal team via the secure and private online form or call our firm directly toll-free at 1-800-950-6553 for a free consultation so that we can discuss your case and see what we can do to help you get the compensation you need and deserve. We do not charge anything for the ability to discuss your matter and evaluate your potential case.
Jump to Topic
Do I Have an Investment Fraud Case Against Edward Jones?
How To File a Claim Against Edward Jones To Get Your Money Back
Client Complaints – Is Your Financial Advisor on This List?
Did Misconduct By an Edward Jones Advisor Impact Your Investments? What Can You Do?
Edward Jones Has Many Regulatory Complaints and Fines
A Closer Look Into Edward Jones’ Regulatory Issues
Next Steps and Free Consultation with Our Legal Team
Do I Have an Investment Fraud Case Against Edward Jones?
✅ YES, if you’ve experienced financial losses due to the actions or misconduct of Edward Jones or its staff, you have the right to pursue legal action against them. You can sue Edward Jones but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.
FINRA arbitration proceedings are generally private proceedings that can last anywhere from a few months to approximately a year. Our attorneys have personal experience in representing clients in FINRA arbitration proceedings and know very well how you can not only sue Edward Jones in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a case against Edward Jones is to reach out to our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a complimentary consultation.
Who is Edward Jones?
Edward Jones (CRD # 250) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors. As a registered broker-dealer, Edward Jones is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests. A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
How To File A Claim Against Edward Jones To Get Your Money Back
If you have questions about Edward Jones, its advisors, or the management or performance of your accounts, please contact our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a free and complimentary initial consultation. Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date.
We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money. We can help you, as we have helped hundreds of other clients in the past.
Client Complaints – Is Your Financial Advisor on This List?
There have been scores of customer complaints filed against Edward Jones stockbrokers and investment advisors over the years. Many of these complaints deal with financial advisor misconduct, poor or unsuitable investment recommendations, failure by these brokerage firms to supervise their employees (the financial advisors), and general fraud against consumers. We have launched many investigations of current and former Edward Jones advisors:
- Aaron Gore with Ameriprise Financial (previously with Voya Financial and Edward Jones)
- Michael Francoeur currently barred (previously with Cambridge Investment Research and Edward Jones)
- David Llewellyn with Cambridge Investment Research (previously with Cambridge Investment Research Advisors and Edward Jones)
- Shanna Tingom with Cambridge Investment Research (previously with Cambridge Investment Research Advisors and Edward Jones)
- Steven Trevor Skipper with Cetera Advisors (previously with LPL Financial and Edward Jones)
- Galen Kyle Kopman currently unaffiliated (previously with Centaurus Financial and Edward Jones)
- Eric John Batey with Berthel, Fisher & Co. Financial Services (previously with LPL Financial Corporation and Edward Jones)
- Bret Edensword with LPL Financial (previously with Edward Jones)
- Evan Lunsford with LPL Financial (previously with Edward Jones and Northwestern Mutual Investment Services)
- Joseph Malboeuf with LPL Financial (previously with Lincoln Financial Securities and Edward Jones)
- Christopher Riggs currently unaffiliated (previously with LPL Financial and Edward Jones)
- Joel Arivett currently unaffiliated (previously with Arvest Wealth Management and Edward Jones)
- Dain Stokes currently barred (previously with LPL Financial and Edward Jones)
- Lester Lee Jr. with LPL Financial (previously with Edward Jones)
- Mary Alice Henry with LPL Financial (previously with Edward Jones and Prudential Securities)
- William McDonough currently unaffiliated (previously with LPL Financial and Edward Jones)
- Joseph Brittingham with LPL Financial (previously with Edward Jones)
- James Stottlemyre currently unaffiliated (previously with LPL Financial and Edward Jones)
- Lawrence Avery with LPL Financial (previously with Edward Jones and Robert W. Baird & Co.)
- Keri Blake with LPL Financial (previously with Wealthcare Advisory Partners and Edward Jones)
- Johnny Ceballos with LPL Financial (previously with Golden State Wealth Management and Edward Jones)
- Bradley Hill with LPL Financial (previously with Cuso Financial Services and Edward Jones)
- Gleason Swassing III currently unaffiliated (previously with LPL Financial and Edward Jones)
- Gregory Shoemaker with LPL Financial (previously with Cornerstone Wealth Management and Edward Jones)
- Jeanann Kramer with LPL Financial (previously with Gateway Wealth Partners and Edward Jones)
- Jonathan Bridges with LPL Financial (previously with Edward Jones)
- Keith Laterrade with LPL Financial (previously with Edward Jones)
- Patrick Pepper with LPL Financial (previously with Edward Jones and Morgan Stanley)
Did Misconduct By a Edward Jones Advisor Impact Your Investments?
If you have lost money investing with any of these Edward Jones advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call our legal team at Patil Law toll-free at 1-800-950-6553 or reach out to us via the secure and private online form for a free initial consultation.
Edward Jones Has Many Regulatory Complaints and Fines
There have been approximately seventy-six (76) state and self-regulatory body disclosure events against Edward Jones; that is, final and formal proceedings initiated by a regulatory authority like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been countless customer complaints filed against Edward Jones for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
Our legal team at Patil Law has reported and written about these regulatory problems and customer complaints over many years. A few of the notable FINRA Sanctions for its Supervisory Failures are below.
A Closer Look Into Edward Jones’ Regulatory Issues
Edward Jones has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. Details of seventy-six (76) regulatory issues are listed below:
Fined $1.1 Million for Alleged Supervisory Failures In Completing Phone Records In Response To FINRA Requests (AWC No: 2020066649301)
Overview from FINRA’s Disciplinary Office:
From May 2017 to March 2021, Edward Jones failed to timely or completely produce certain phone records responsive to FINRA document requests in ten separate FINRA investigations. In certain responses during this period, the firm also inaccurately represented to FINRA that phone records older than 18 months were not available, even though that was not the case. The firm also failed to promptly alert FINRA once it learned of its production failures. By reason of the foregoing, Edward Jones violated FINRA Rules 8210 and 2010.
Fined $40,000 for Alleged Understatement Of Customers’ Alleged Damages (AWC No: 2018056422401)
Overview from FINRA’s Disciplinary Office:
Edward Jones’ disclosures to FINRA of seventy-nine customer complaints over a two-year period understated the customers’ alleged damages. Those misleading filings violated FINRA Rules 1122 and 2010 and Article V, Section 2(c) of FINRA’s by-laws.
Fined $725,000 for Alleged Supervisory Failures In Creating And Dissemination of Consolidated Reports (AWC No: 2016049783001)
Overview from FINRA’s Disciplinary Office:
From April 2010 through 2014 (the “Relevant Period”), the Firm failed to establish, maintain, and enforce an adequate supervisory system, including written procedures, concerning the creation and dissemination of consolidated reports in violation ofNASD Rule 3010(a) and FINRA Rule 2010. During this time period. the Firm made available to its registered representatives two centralized and automated tools, which provided templates for reports that could be used to, among other things, present comprehensive financial information to customers, including outside asset information. While the Firm used internally approved templates, the Firm had no system or written procedures in place reasonably designed to minimize the risk that the reports could contain inaccurate information that potentially could be misused. In addition, although registered representatives printed the reports and provided them to customers, the Firm could track only whether a report was printed. It had no system or procedures to track whether reports were provided to customers. During the Relevant Period, registered representatives at the Firm generated approximately 52 million reports using the two tools.
Fined $210,000 for Alleged Supervisory Failures In Complying With MSRB Rule (AWC No: 2015046579901)
Overview from FINRA’s Disciplinary Office:
In 20150465799, the Department of Market Regulation’s Municipal Securities Bonds Team and the Department of Member Regulation (collectively, the “staff’) reviewed the firm’s compliance with MSRB Rule G-15(D during the period December 1, 2013 through December 31, 2014 (the ”review period”).
MSRB Rule G-15(f)(i) prohibits a broker, dealer, or municipal securities dealer from effecting a customer transaction in municipal securities issued after June 1, 2002 in an amount lower than the minimum denomination of the issue.
Issuers set minimum denominations for the purchase or sale of municipal securities and, generally, disclose th6se minimum denominations in official Statements, which are documents prepared by or on behalf of the issuer of municipal securities in connection with a primary offering. Minimum denominations generally range from $5,000 to $100,000. An issuer may set a minimum denomination at $100,000 or higher to qualify for one of several exemptions from Securities Exchange Act Rule 15c2-12, which is designed to ensure production of certain disclosure documents in the primary and secondary markets. In addition, an issuer may set high minimum denominations because of a concern that the offered securities may not be appropriate for retail investors who are likely to purchase securities in relatively small amounts.
There are two limited exceptions to executing transactions below the minimum denomination. First, under MSRB Rule G-15(f)(iD, a dealer may purchase municipal securities from a customer in an amount below the minimum denomination of the issue if the dealer determines that the customer’s position in the issue is already below the minimum denomination and the customer’s entire position in the issue would be liquidated by the transaction.
Second, under MSRB Rule G-15(f)(iii), a dealer may sell municipal securities to a customer in an amount below the minimum denomination of the issue if the dealer determines that the position being sold resulted from the liquidation of another customer’s entire position in the issue which was below the minimum denomination of the issue. Additionally, a dealer selling under MSRB Rule G-15(0(iii) must, at or before the completion of the transaction, notify the customer that the amount of the transaction is below the minimum denomination of the issue and that this may adversely affect the liquidity of the customer’s position.
Under MSRB Rule G-15(f), brokers, dealers, and municipal securities dealers may not sell (or buy) municipal securities in amounts below the minimum denomination of an issue to a customer regardless of whether the customer holds would hold a position in the issue which is equal to or exceeds the minimum denomination of the issue.
MSRB Rule G-17 requires a broker, dealer or municipal securities dealer effecting a municipal securities transaction to disclose to its customer all material information about the transaction known by the broker, dealer or municipal securities dealer, as well as material information about the security that is reasonably a?essible to the market. Such disclosure must be made at or prior to the sale of the municipal securities to the investor (i.e., when the investor and the dealer agree to make the trade), also referred to as the ”time of trade.”
The staff determined that the firm violated these MSRB rules as described below.
Fined $125,000 for Allegedly Overcharging Interest On Loans (AWC No: 2016048760501)
Overview from FINRA’s Disciplinary Office:
For two years, Edward Jones overcharged interest totaling approximately $708,000 on loans to the owners of 6,127 customer accounts. The overcharges occurred because Edward Jones did not adequately supervise its system for determining the interest rates on those loans. As a result, Edward Jones violated NASD Rule 3010(a) and FINRA Rules 2010 and 3110(a).
Fined $200,000 for Alleged Supervisory Failures In Addressing Short Positions In Tax-Exempt Municipal Bonds (AWC No: 2015045548001)
Overview from FINRA’s Disciplinary Office:
From June 2009 through December 2014 (the “relevant period”), Edward Jones failed to reasonably supervise and to have an adequate supervisory system, including adequate written supervisory procedures, to address short positions in tax-exempt municipal bonds that resulted primarily from trading errors. As a result of these supervisory failures, Edward Jones inaccurately represented to its customers holding municipal bonds that at least $129,624.06 in interest that the Firm paid to those customers was exempt from taxation. In fact, the Firm did not hold the bonds on behalf of the customers and the interest that the customers received was paid by Edward Jones and thus taxable as ordinary income. The Firm failed to consider – and its Corporate Action and Distribution department that was responsible for distributing and reconciling the interest owed to customers did not take into account – whether the interest paid to customers should be coded as non-taxable when the interest was paid by the Firm rather than the municipal issuer. Edward Jones’ failure to have adequate systems and procedures to address instances in which it became short municipal bonds violated MSRB Rule G-27. The Firm’s misstatements to customers regarding the tax-exempt status of interest payments violated MSRB Rules G-17 and G-8. And, its failure to maintain a record of the customers to whom its municipal short positions were allocated violated MSRB Rule G8.
Fined for Allegedly Disadvantaging Certain Retirement Plan And Charitable Organization Customers (AWC No: 2015045354201)
Overview from FINRA’s Disciplinary Office:
Since at least July 1, 2009, Edward Jones disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge (“Eligible Customers”). These eligible Customers were instead sold ClassA shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. During this period, Edward Jones failed to establish and maintain a supervisory system and procedures reasonably designed to ensure that Eligible Customerswho purchased mutual fund shares received the benefit of applicable sales charge waivers. As a result, Edward Jones violated NASD Conduct Rule 3010 (for misconduct before December 1,2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and FINRA Rule 2010.
Fined $10,000 for Allegedly Failing To Capture The Correct Time Of Trade Execution For 306 Transactions In Trace-Eligible Securitized Products (AWC No: 2014041068801)
Overview from FINRA’s Disciplinary Office:
In Matter No. 20140410688, the Trade Reporting and Compliance Engine (“TRACE”) Section of the Department ofMarket Regulation (the “staff”) conducted a review of the firm’s compliance with TRACE reporting rules during the period January 1,2014 to March 31, 2014 (the “review period”). As a result of its review, the staff found the following violations:
During the review period, the firm failed to capture the correct time of trade execution for 306 transactions in TRACE-eligible securitized products. As a result, the firm: (1) failed to report to TRACE the correct time of trade execution for 306 transactions in TRACEeligible securitized products; and (2) failed to show the correct time of execution on the memorandum of306 brokerage orders. The conduct described in this paragraph constitutes, respectively, separate and distinct violations ofFINRA Rule 6730(c)(8), and Securities Exchange Act of 1934 Rule 17a-3 and FINRA Rules 2010 and 4511.
Fined $75,000 for Alleged Supervisory Failures In Preventing Unauthorized Transfers of Customer Funds To Third-Party Accounts (AWC No: 2013037060701)
Overview from FINRA’s Disciplinary Office:
From December 1, 2006 to November 30,2012 (“the relevant period”), Edward Jones failed to establish, maintain and enforce a supervisory system, including a written supervisory control system, reasonably designed to prevent unauthorized transfers of customer funds to third-party accounts, in violation ofNASD Rules 3010,3012(a)(2)(B)(i), 2110 and FINRA Rule 2010.
Fined $60,000 for Alleged Supervisory Failures In Overseeing Certification of Customer Signatures On Certain Documents (AWC No: 2012032011102)
Overview from FINRA’s Disciplinary Office:
This matter involves the Firm’s failure to adequately supervise the certification of customer signatures on certain documents that required Firm employees to attest that the customers had signed the documents in their presence. Specifically, from 2002 to July 2013, the firm failed to establish, maintain, and enforce an adequate supervisory system and written procedures concerning the certification of customer signatures on such Documents in violation of NASD Rules 3010 (a) and (b), NASD Rule 2110 (for the period before December 15, 2008) and FINRA Rule 2010 (for the period on or after December 15, 2008). As a result of these supervisory deficiencies, Firm employees falsely certified customer signatures on certain documents over an 11-year period.
Fined $100,000 for Alleged Supervisory Failures In Implementing Adequate Anti-Money Laundering Procedures (AWC No: 2012031611301)
Overview from FINRA’s Disciplinary Office:
Between August 2008 and June 2013, Edward Jones failed to develop and implement adequate anti-money laundering (“AML”) procedures for reviewing deposits and liquidations of third-party stock certificates in customer accounts. As a result, on approximately 87 occasions during that period. Certain Firm customers deposited and liquidated various third-party stock certificates that were beneficially owned by individuals who were either previously denied their own account with Edward Jones who were otherwise ineligible to establish an account at the Firm. Edward Jones failed to obtain any information regarding the relationship between the stockholder and the account holder in such i,is?ances and failed to have procedures by which to track or investigate situations where third party stock certificates were deposited into a Firm account. The foregoing conduct violates NASD Rules 3011(a) (for conduct occurring before January 1, 2010) and 2110 (for conduct occurring before December 15,2008) and FINRA Rules 3310(a) (for conduct occurring on or after January 1,2010) and 2010 (for conduct occurring on or after December 15, 2008).
Fined $21,100 for Alleged Supervisory Failures In Ensuring The Best Inter-Dealer Market (AWC No: 2011027686301)
Overview from FINRA’s Disciplinary Office:
In connection with FINRA Matter No. 20110276863, the Fixed Income staff of the Department of Market Regulation (the “staff”) reviewed the firm’s agency bond transactions from January 1, 2011 through March 3 1, 20I 1 (the “review period”). In connection with FINRA Matter No. 20110280612, the staff reviewed the firm’s municipal bond transactions from January 1,2011 through March 31, 2011 (the “review period”).
Fined $200,000 for Alleged Supervisory Failures In Ensuring Compliance With Securities Laws And Regulatory Rules Regarding The Sales Of Leveraged And Inverse Exchange Traded Funds (AWC No: 2010022283702)
Overview from FINRA’s Disciplinary Office:
Between January 1,2008 and July 31,2009, Edward Jones failed to establish and maintain a supervisory system, including written procedures, that was reasonably designed to ensure that the firm’ s sales of leveraged and inverse exchange traded funds (collectively ”nontraditional ETFs”) complied with applicable securities laws and NASD and FINRA rules. Through this conduct, Edward Jones violated NASD Conduct Rules 3010 and 2110, andFINRA Rule 2010.
During the same time period, certain registered representatives of Edward Jones recommended nontraditional ETFs to customers without first investigating those products sufficiently to understand the features and risks associated with them. These recommendations were, therefore, unsuitable. Through this conduct, Edward Jones violated NASD Conduct Rules 2310 and 2110, and FINRA Rule 2010.
Fined $160,000 for Allegedly Purchasing Municipal Securities For Its Own Account From Customers (AWC No: 2009018103101)
Overview from FINRA’s Disciplinary Office:
In connection with 20090181031, the Fixed Income Staff of FINRA’s Department of Market Regulation reviewed the firm’s compliance with its best execution obligations in connection with the purchase or sale of municipal securities during the period of October 1, 2008 through December 31, 2008 (the “review period”).
Fined $35,000 for Alleged Supervisory Failures In Ensuring That Representatives’ Forms U4 Were Updated (AWC No: 2010025367601)
Overview from FINRA’s Disciplinary Office:
Prior to July 13,2012, Edward Jones did not establish and maintain written supervisory procedures to ensure that registered representatives’ Uniform Applications for Securities Industry Registration or Transfer (“Forms U4”) were updated to reflect unsatisfied judgments and liens of which the Firm’s Payroll Department was on notice. As a result, the Firm did not timely file Form U4 amendments in such circumstances. Such conduct constitutes a violation of Article V, Section 2(c) of the FINRA By-Laws, FINRA Rule 2010, and NASD Rules 3010(b) and 2110.
Fined $95,000 for Alleged Supervisory Failures In Preventing A Representative To Falsify Customer Signature (AWC No: 2010021566902)
Overview from FINRA’s Disciplinary Office:
From November 13, 2008 through November 30, 2009 (the “relevant time period”), registered representative Diana Villalvazo (“Villalvazo”) converted approximately $167,249 from a customer’s Edward Jones account by falsifying the customer’s signature on 51 Letters of Authorization (LOAs) wiring those funds to her minor daughter’s bank account. The Firm failed to adequately respond to the red flags that would have alerted it to Villalvazo’s improper conduct.
Fined $55,000 for Alleged Supervisory Failures In Providing The Best Inter-Dealer Market (AWC No: 2006005438901)
Overview from FINRA’s Disciplinary Office:
In 20060054389, the staff of the Fixed Income Section of the Department of Market Regulation reviewed the firm’s compliance with its best execution obligations in connection with the purchase or sale of corporate fixed income securities during the period from January 1, 2004 through December 31, 2004.
In 20070100697, the staff of the Fixed Income Section of the Department ofMarket Regulation reviewed the firm’s compliance with its best execution obligations in connection with the purchase or sale of municipal securities during the period from April 1, 2007 through June 30, 2007.
In 20080141288, the staff of the Short Sales Section of the Market Regulation Department conducted a review of the firm’s short interest position reports from July 31, 2007 through February 27, 2009.
In 20080136345, the staff of the Fixed Income Section of the Department ofMarket Regulation reviewed the firm’s compliance with its best execution obligations in connection with the purchase or sale of municipal securities during the period from January 1, 2008 through March 31, 2008.
Fined $200,000 for Alleged Supervisory Failures In Reviewing and Monitoring All Transmittals Of Funds (AWC No: 2007010537701)
Overview from FINRA’s Disciplinary Office:
During the period from January 31, 2005 through August 2007, Edward Jones failed to establish, maintain and enforce a supervisory system that was reasonably designed to review and monitor all transmittals of funds from the accounts of Customers to third party accounts, in violation of NASD Rules 3010(a), 3012(a)(2)(B)(i) and 2110. Specifically, the finn relied on a defective report to review and monitor third party wires from customer accounts, and failed to properly test and verify that the system providing the report was functioning properly, as required by Rule 3012. As a result, the report failed to identify wires from accounts from which an Edward Jones Registered Representatives was converting funds.
Fined $900,000 for Alleged Supervisory Failures In Delivering Official Statements On Time (AWC No: 2006006509601)
Overview from FINRA’s Disciplinary Office:
From 2002 to 2008, Edward Jones violated MSRB Rule G-32 in new issue transactions in which it was not a syndicate member. This rule requires broker-dealers to deliver official statements by settlement date to customers who purchase new issued municipal securities. From 2002 to2006, the firm’s violations of Rule G-32 were systemic. During this initial four-year period, the firm was repeatedly on notice that it was not timely delivering official statements, but failed to take reasonable and sufficient steps to comply with its delivery obligations when the firm was not a member of the syndicate. The firm’s failures were due to multiple problems, including incorrect instructions to those responsible formailing the official statements, failure to timely print and make copies of official statements, and inattention to a number of systemic deficiencies, including the failure to obtain official statements from the underwriter or syndicate in a timely manner. Violations ofRule G-32 continued to occur from 2006 to 2008.
The firm also failed to keep books and records regarding official statement deliveries as required by MSRB Rule G-8, and failed to establish and maintain adequate supervisory systems and procedures. As a result, Edward Jones violated MSRB Rules G-32, G-8, G-27, and G-17.
Fined $10,000 for Alleged Supervisory Failures In Delivering Transaction Reports On Time (AWC No: 2006006054601)
Overview from FINRA’s Disciplinary Office:
In connection with matter 20060060546, the Market Regulation Department staff (the “staff”) conducted a review of the firm’s compliance with trade reporting and compliance engine (“TRACE”) reporting requirements during the period April 1,2006 through June 30, 2006. The staff determined that the firm reported 3,980 transactions in TRACEeligible securities to TRACE late. The staff allowed the firm to review a sample of 180 transactions. The sample suggests a violation rate of approximately eight percent of the total number of transactions in TRACE-eligible securities reported during the review period.
Fined $250,000 for Alleged Supervisory Failures In Providing Certain Investors The Chance To Buy Class A Shares At Their Net Asset Value (AWC No: EAF0401100001)
Overview from FINRA’s Disciplinary Office:
From January 1, 2002 through December 31,2004, (“the relevant period”), Edward Jones failed to provide certain investors the opportunity to purchase Class A shares of certain mutual funds at net asset value (“NAV”). In particular, certain mutual funds offered -NAV Transfer Programs” that allowed investors to purchase Class A shares at NAV and not pay any sales charges, if the customer invested proceeds from the redemption of shares of a fund of another mutual fund family within specified time frames and previously had paid either a front-end or back-end sales charge.
During the relevant period, Edward Jones failed to exercise reasonable due diligence to identify the essential terms and conditions of all NAV Transfer Programs offered by the mutual hinds that it sold, and failed to establish, maintain and enforce a system and procedures to ensure that all of its customers received NAV pricing under available NAV Transfer Programs when appropriate. As a result, some investors who were eligible to purchase Class A shares under NAV Transfer Programs (1) purchased Class A shares and incurred front-end sales charges that they should not have paid, and/or (2) purchased other share classes of these mutual funds and thereby became subject to back-end sales charges, also known as contingent deferred sales charges (”CDSCs”), as well as higher ongoing distribution and service fees (”Rule 12b-1 fees” or “fees”), typically associated with share classes other than Class A.
Fined $150,000 for Alleged Supervisory Failures Allowing Financial Advisor To Receive Payments From Client (Docket/Case Number: S-21-3243-22-CO01)
Overview from FINRA’s Disciplinary Office:
The Washington State Department of Financial Institutions, Securities Division (The “Division”) alleged that between 2017 and 2021, Edward Jones violated RCW 21.20.110(1)(J) by failing to supervise a former financial advisor, who the Division alleged received payments of gifts and loans totaling approximately $550,000.00 from an elderly client without disclosing the payments to Edward Jones. The Division further alleged that Edward Jones failed to detect the financial advisor’s undisclosed outside business.
Fined $50,000 for Alleged Supervisory Failures In Complying With Nevada Securities Act (Docket/Case Number: INV20-096)
Overview from FINRA’s Disciplinary Office:
Respondent violated NRS 90.420 by failing to establish and maintain a system to supervise the activities of its associated persons that is reasonably designed to achieve compliance with the Nevada Securities Act.
Fined $10,000 for Alleged Supervisory Failures In Overseeing A Financial Advisor’s Recommendations
Overview from FINRA’s Disciplinary Office:
In connection with a complaint by a South Dakota public customer, the South Dakota Division of Insurance, Department of Labor and Regulation alleged that Edward Jones failed to supervise a single financial advisor in connection with that financial advisor’s recommendation of certain mutual funds to the customer in violation of the South Dakota Securities Act and FINRA Rules 2010 and 3110.
Fined $50,000 for Alleged Supervisory Failures Allowing Agent To Continue To Violate Trade Restrictions and Firm Policies (Docket/Case Number: S-16-0017)
Overview from FINRA’s Disciplinary Office:
The Order found that the firm failed to establish, maintain, and enforce a system to adequately supervise the activities of the agent. The agent was allowed to continue to violate his trade restrictions and firm policies without sufficient consequence while on special supervision. The firm failed to properly disclose a complaint and settlement related to the agent. The firm failed to update and disclose the fact that the agent was the subject of an internal review relating to conduct while on special supervision at the time of termination.
Fined $135,000 for Alleged Supervisory Failures In Supervising Agent’s Activities (Docket/Case Number: 2016-03-02 (#160043))
Overview from FINRA’s Disciplinary Office:
Edward D. Jones & Co., L.P. failed to reasonably supervise its agent whose acts and conduct were in violation of the Pennsylvania Securities Act of 1972.
Fined $100,000 for Allegedly Violating Antifraud Provision (Docket/Case Number: 3-16867)
Overview from FINRA’s Disciplinary Office:
SEC Admin Releases 33-9955; 34-76052; September 30, 2015: The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted against Edward D. Jones & Co., L.P., (“respondent”). Respondent willfully violated Section 17(A)(2) of the Securities Act. This matter involves violations of an antifraud provision of the federal Securities Laws in connection with respondent’s underwriting of certain municipal securities offerings. Respondent, a registered broker-dealer, conducted inadequate due diligence in certain offerings and as a result, failed to form a reasonable basis for believing the truthfulness of certain material representations in official statements issued in connection with those offerings. This resulted in respondent offering and selling municipal securities on the basis of materially misleading disclosure documents. The violations were self-reported by respondent to the commission pursuant to the Division of Enforcement’s (The “Division”) municipalities continuing disclosure cooperation (MCDC) initiative.
Fined $15,000,000 for Alleged Supervisory Failures In Preventing Certain Improper Trading Practices (Docket/Case Number: 3-16751)
Overview from FINRA’s Disciplinary Office:
SEC admin release 33-9889/34-75688/August 13, 2015: The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (Securities Act) and Sections 15(B), 15B(C), and 21C of the Securities Exchange Act of 1934 (Exchange Act) against Edward D. Jones & Co., L.P. as an underwriting co-managing syndicate member for new issue negotiated municipal securities, in certain instances the firm failed to make bona fide public offerings to its customers at initial offering prices. In the secondary market for municipal securities, the firm failed to have internal controls to prevent certain improper trading practices. With respect to underwriting new issue municipal bonds, from at least February 2009 to December 2012, and in violation of its fundamental obligations as a member of the underwriting syndicate, the firm’s municipal syndicate desk, in several negotiated offerings where it served as a co-manager, obtained new issue municipal bonds for its own inventory and then offered those bonds to customers for prices higher than the initial offering prices negotiated with the issuer before the bonds began trading. In some of these instances during the relevant period, the firm’s municipal syndicate desk refrained entirely from offering new issue municipal bonds to its customers at any price until after the bonds began trading, at which point the firm offered and sold bonds to its customers at prices above the initial offering prices. The firm’s sale of municipal bonds to its customers at prices higher than initial offering prices increased its revenues from municipal underwriting. During the relevant period, the firm collected at least $4.647 million in revenue with these practices through the offer and sale of about 156 different bonds in 75 negotiated offerings in which the firm served as a co-manager. This amount was in addition to fees that the firm earned as a member of the syndicate for certain of those offerings. The firm’s misconduct harmed its customers by causing them to pay prices higher than the initial offering prices for municipal bonds. In addition, in one instance, the firm’s misconduct resulted in an adverse federal tax determination for one municipal issuer, creating a risk that the issuer could lose valuable federal tax subsidies. With respect to trading municipal bonds in the secondary market, between January 2011 and October 2013, the firm failed to establish an adequate supervisory system to identify and review certain of the firm’s customer orders to buy and sell municipal securities. As a result, the firm was unable to adequately monitor whether the markups it charged for certain transactions were reasonable. Beginning in 2013, the firm began to undertake significant remedial measures related to the underwriting and secondary trading of municipal bonds, including the disclosure of the percentage and dollar amount of markups/markdowns on all of its fixed income retail order confirmations, the hiring of additional compliance personnel, and the adoption and implementation of new and enhanced supervisory procedures. As a result of its conduct, the firm willfully violated Sections 17(A)(2) and (3) of the Securities Act, Section 15B(C)(1) of the Exchange Act, and Securities Rulemaking Board (MSRB), and failed reasonably to supervise within the meaning of Section 15(B)(4)(E) of the Exchange Act.
Fined $750,000 for Alleged Solicitation Calls (Docket/Case Number: C-2012000002)
Overview from FINRA’s Disciplinary Office:
Violations of N.H. RSA 421-B:8, X which requires licensee comply with rules of Securities and Exchange Commission, FINRA, National and Regional Stock Exchanges, and other self-regulating organizations which have jurisdiction over the licensee.
Allegations included solicitations calls being made in violation of applicable telephone solicitation rules, failure to properly train and supervise agents in the area of telephone solicitation, and failure to establish system and procedures reasonably designed to ensure compliance with applicable telephone solicitation rules.
Fined $10,000 for Alleged Supervisory Failures In Maintaining Accurate Records And Books
Overview from FINRA’s Disciplinary Office:
The Nebraska Department of Banking and Finance alleged that Edward Jones: (1) failed to maintain true and accurate records; and (2) failed to maintain required books and records. The allegations stem from a single financial advisor’s handling of her minor child’s custodial account.
Fined $10,000 for Alleged Supervisory Failures In Overseeing A Financial Advisor (Docket/Case Number: 10-0504 CA)
Overview from FINRA’s Disciplinary Office:
In July 2009, the Indiana Secretary of State, Securities Division (The “State”) alleged that Edward Jones failed to supervise the activities of a now deceased financial advisor. Specifically, the State alleged the financial advisor was able to change the primary account holder and social security number on an account by submitting a form to the headquarters office without the required number of signatures, in violation of firm policy.
Fined $10,000 for Alleged Supervisory Failures In Detecting A Representative’s Conflicting Explanations Regarding CD Transactions (Docket/Case Number: 08-012)
Overview from FINRA’s Disciplinary Office:
Edward Jones committed two failures to reasonably supervise Warren Spencer by failing to detect or take timely action to address Spencer’s conflicting explanations regarding a client’s CD transaction and by failing to detect or adequately investigate Spencer’s routine use of discretion in the accounts of two clients. Further, Edward Jones did not exercise sufficient diligence in confirming the accuracy of its representations to the Maine Office of Securities.
Fined $100,000 for Alleged Supervisory Failures Allowing An Advisor to Misappropriate Customer Funds (Docket/Case Number: SEC-2010-32)
Overview from FINRA’s Disciplinary Office:
The Montana Securities Department Investigated the actions of a former financial advisor for allegedly misappropriating customer funds.
Fined $40,500 for Alleged Supervisory Failures In Overseeing An Agent In Connection With Unsuitable Variable Annuity Sales (Docket/Case Number: AP-10-15)
Overview from FINRA’s Disciplinary Office:
Failure to reasonably supervise a Missouri-registered agent in connection with the unsuitable sale of a variable annuity to a Missouri resident.
Fined for Allegedly Engaging In Fraudulent Activities (Docket/Case Number: SEC-2007-00021)
Overview from FINRA’s Disciplinary Office:
It is alleged that the firm violated Section 13.1-502(3) of the Virginia Securities Act, Section 13.1-501 ET. Seq. of the code of Virginia, by engaging in a transaction, practice of course of business which operates as a fraud or deceit upon a purchaser; violated Securities Rule 21 VAC 5-20-240 by failing to make and keep true, accurate and current, and preserve the books and records relating to its business, as described in Sec Rule 17A-4(B); violated Securities Rule 21 VAC 5-20-260 B by failing to exercise diligent supervision over the activities of an agent; violated Securities Rule 21 VAC 5-20-260 D by failing to establish, maintain and enforce written procedures, which set forth procedures adopted by a broker-dealer; violated Securities Rule 21 VAC 5-20-260 D(2) by failing to perform frequent examinations of all customer accounts to detect and prevent irregularities or abuses; and violated Securities Rule 21 VAC-5-20-260 D(4) by failing to review and receive written approval by the designated supervisor of the delegation by any customer of discretionary authority with respect to the customer’s account to the broker-dealer or to a stated agent or agents of the broker-dealer and the prompt written approval or each discretionary order entered on behalf of the account.
Fined $250,000 for Alleged Supervisory Failures In Disclosing Revenue Sharing From Preferred Mutual Fund Sales (Docket/Case Number: 05-053-CAG)
Overview from FINRA’s Disciplinary Office:
The Office of Securities alleged that Edward Jones violated the revised Maine Securities Act Sections 10201 and 10313(1)(G), 32M.R.S.A. paragraph 10101-10713, when it failed to disclose to its Maine clients that it received revenue sharing payments from the sale of preferred mutual funds.
Fined $7,500 for Alleged Supervisory Failures In Following Office Procedures (Docket/Case Number: 06E018/KSC 2004-4808)
Overview from FINRA’s Disciplinary Office:
Failure to follow office procedures; failure to supervise.
Fined $300,000 for Allegedly Omitting Yield To Maturity Disclosure On Transaction Confirmations For Customers (Docket/Case Number: E3B2004011101)
Overview from FINRA’s Disciplinary Office:
MSRB Rule G- 15(A)(I)(A)(5) and G-27(C); failure to disclose yield to maturity on transaction confirmations issued to customers who sold municipal securities.
Edward Jones included yield information confirmations issued to customers when they purchased municipal securities, but because of a change in it’s automated systems, that information was omitted from the confirmations issued to customers who sold municipal bonds.
Edward Jones’ supervisory system and its written supervisory procedures were not adequate to ensure that confirmations issued to its customers in municipal securities transactions disclosed the information required by the MSRB Rule.
Fined $1,500,000 for Alleged Supervisory Failures In Disclosing Information (Docket/Case Number: AP-05-31)
Overview from FINRA’s Disciplinary Office:
Failure to disclose information
Fined $5,500 for Alleged Supervisory Failures In Overseeing Advisor Regarding Disbursement Of Funds In Client’s IRA Account (Docket/Case Number: 05-101-S)
Overview from FINRA’s Disciplinary Office:
Commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration alleges Edward Jones did not adequately supervise a financial advisor in the disbursement of funds in a client’s IRA account.
Fined $37,500,000 for Alleged Supervisory Failures In Disclosing Receipt Of Revenue Sharing Payments (Docket/Case Number: 3-11780)
Overview from FINRA’s Disciplinary Office:
SEC Admin Release No. 33-8520A, Securities Exchange Act 34-50910A, July 13, 2007; amended order: the Securities and Exchange Commission complaint alleges that respondent violated the Federal Securities Laws by failing to disclose its receipt of revenue sharing payments for distribution of shares of mutual funds and Section 529 college savings plans from seven “preferred mutual fund families.” Respondent wilfully violated Section 17(A)(2) of the Securities Act, Rule 10B-10 under the Exchange Act, Section 15B(C)(1) of the Exchange Act, Edward Jones also contravened the dictates of Municipal Securities Rulemaking Board (“MSRB”) Rule G-15.
Fined $75,000,000 for Alleged Fraudulent Statements And Omission of Material Facts (Docket/Case Number: HPD#: 04-194)
Overview from FINRA’s Disciplinary Office:
**12/22/04**Allegations:1.Violated Section 17(A)(2) of the Securities Act [15 U.S.C. 77Q(A)(2)] in that Edward Jones, in the offer or sale of Securities, by the use of means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly obtained money or property by means of untrue statements of material fact or omissions to state material facts necessary in order to make the statements made in light of the circumstances under which they were made, not misleading.2.violated Section 10B-10 of the Exchange Act [17 C.F.R. 240.10B-10] in that Edward Jones, effected purchases or sales by customers of, securities without, at or before completion of such transactions, giving or sending the customers written notification disclosing the sources and amounts of any other remuneration it received or was to receive in connection with the transactions.
3.Engaged in conduct inconsistent with just and equitable principles of trade in violation of Exchange rule 476(A)(6) in that:A.the firm encouraged investment representatives to sell mutual fund shares based in part on the amount of revenue the firm received from certain mutual fund companies;B.The firm failed to adequately disclose the source and amount of remuneration received or to be received in connection with the sales of college savings 529 plans;C.the firm failed to send or give written confirmations to customers, at or before the completion of municipal securities transactions, that disclosed either the source and any amount of any remuneration it received or was to receive in connection with the transaction from persons other than the customers, or a statement indicating whether it received or will receive any such remuneration and that the source and amount of such other remuneration will be furnished upon written request of the customers in violation of the dictates of Municipal Securities Rulemaking Board (MSRB) Rule G-15.**continued at #14**
Fined $75,000,000 for Allegedly Prioritizing The Sales Of Certain Mutual Funds Over Others (Docket/Case Number: CAF040115)
Overview from FINRA’s Disciplinary Office:
Sections 17(A), 17(A)(1), 17(A)(2) of the Securities Act and Rules 17A-4, 17A-4(B)(4) thereunder Section 15B(C)(1) of the Exchange Act, Rule 10B-10 under the Exchange Act, Municipal Securities Rulemaking Board Rule G-15, NASD conduct rules 2110, 2210, 2830(K), 2830(I), 2820(G), 3110, 3010 – Edward Jones (the “firm”) and its partners had a financial incentive to internally promote the sales of mutual funds from the preferred families over other mutual funds that is registered representatives (“RRS”) could sell. In addition, the firm promoted to its RRS the existence of revenue sharing by preferred families and encouraged RRS on a case-by-case basis to consider revenue sharing in making recommendations to their customers to purchase certain mutual funds. The firm told the public and its clients that it was promoting the sale of the preferred families’ mutual funds because of the funds’ long-term investment objectives and performance. At the same time, Edward Jones failed to disclose that it received tens of millions of dollars from the preferred families each year, on top of commissions and other fees, for selling their mutual funds. The firm did not have sufficient procedures in place to ensure that someone with appropriate knowledge, experience, and authority review the prospectuses and statements of additional information (“SAIS”) of the mutual funds offered by the preferred families to determine if they adequately disclosed revenue sharing and directed brokerage payments made to the firm or the other incentives offered by the preferred families. Moreover, Edward Jones failed to disclose the material financial incentives to the firm, its partners and its RRS to sell 529 plans from certain of the preferred families over the other 529 plans that the firm could sell. Edward Jones received almost $18 million in directed brokerage from three of the preferred families.
Fined $300,000 for Alleged Supervisory Failures In Complying With Its Reporting Obligations (Docket/Case Number: CAF040097)
Overview from FINRA’s Disciplinary Office:
Article V, Sections 2(C) and 3(B) of NASD’s by-laws, and NASD Rules 2110 and 3010 – Edward Jones (“respondent firm”) filed at least 280 late amendments to forms U4 and U5, which represented approximately 27% of the required amendments relating to reportable customer complaints, terminations, regulatory actions, and criminal disclosures. During the relevant period, the respondent firm’s supervisory system and procedures were not reasonably designed to achieve compliance with its article V reporting obligations.
Fined $200,000 for Alleged Supervisory Failures In Preventing Representatives From Making Unsuitable Recommendations (Docket/Case Number: C07040079)
Overview from FINRA’s Disciplinary Office:
NASD Rules 2110, 3010 – Edward Jones had a bonus plan for its representatives whereby the representatives could receive bonus payments based on the profitability of their branch offices; the bonus plan indirectly encouraged its representatives to recommend use of margin loans to public customers. The firm failed to establish and maintain a supervisory system, including written supervisory procedures, reasonably designed to deter and prevent its representatives from making unsuitable recommendations involving the use of margin loans in client accounts as a result of its bonus plan.
Fined $9,500 for Alleged Supervisory Failures In Overseeing Agent (Docket/Case Number: C00-06-540)
Overview from FINRA’s Disciplinary Office:
Alleged Edward D. Jones & Co., LP failed to reasonably supervise its agent, Wayne D. Belner.
Fined $15,000 for Alleged Supervisory Failures In Properly Reporting Transactions To TRACE (Docket/Case Number: CMS040143)
Overview from FINRA’s Disciplinary Office:
NASD Conducts 2110 and 3010 and NASD Marketplace Rule 6230(D)(1) – respondent member reported a PTIE that included its markup/markdown, and improperly reported the markup/markdown as a commission for transactions reported to TRACE; the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and the rules of NASD concerning the reporting of transactions to trace; and, the firm’s supervisory system did not provide for supervision reasonably designed to ensure that the firm’s automated TRACE reporting system reported trades in compliance with NASD Marketplace Rule 6230(D)(1).
Fined $15,000 for Alleged Supervisory Failures In Ensuring Fair And Reasonable Prices In During Transactions (Docket/Case Number: C05040041)
Overview from FINRA’s Disciplinary Office:
MSRB Rules G-17, G-30(A) – Edward Jones Received requests from public customers to liquidate eight different municipal security positions and contacted a broker’s broker and obtained bids for the customers’ securities. Based on the bids provided by the broker’s broker, Edward Jones purchased the securities from the customers for its own account and sold the securities to the broker’s broker at a nominal gain. In all eight instances, the prices paid to the customers and received by the firm were below the fair market value for the security in amounts ranging from 9.04% to 36.00%. By relying solely on the bids provided by the broker’s broker to determine the fair market value of the security, Edward Jones failed to ensure that the transactions were executed at aggregate prices that were fair and reasonable.
Fined $100,000 for Allegedly Violating Multiple Exchange Rules (Docket/Case Number: HPD# 04-32)
Overview from FINRA’s Disciplinary Office:
**12/30/2003** executed stipulation of facts and consent to penalty consented to findings: without admitting or denying guilt, the firm consents to findings by the hearing panel that it violated: 1. Exchange Rule 346(F), by employing individuals, whom the firm knew, or in the exercise of reasonable care, should have known, were subject to statutory disqualification. 2. Exchange Rule 351(A)(9), by failing to promptly report its association with persons subject to statutory disqualification. 3. Exchange Rule 351 (A)(5), by failing to promptly report an employee’s arrest or conviction to the exchange. 4. Exchange Rule 324, by failing to provide for, establish, and maintain adequate procedures and controls, including a system of follow-up and review of its business activities, to ensure compliance with exchange rules and federal securities laws relating to employment of statutory disqualified individuals. Stipulated sanction: the imposition by the exchange of a censure and a $100,000 fine.
Fined $11,000 for Alleged Supervisory Failures In Properly Classifying And Maintaining Records (Docket/Case Number: Alaska Order No. 03-04 S)
Overview from FINRA’s Disciplinary Office:
Alleged failure to properly classify and maintain a record of specified correspondence as a complaint.
Fined $3,000 for Alleged Supervisory Failures Allowing Unregistered Salesperson To Transact Within The State (Docket/Case Number: SEU-98-079)
Overview from FINRA’s Disciplinary Office:
Unregistered salesperson transacting within the state.
Fined $25 for Alleged Violation Of The Association’s Bylaws (Docket/Case Number: N-VS-218)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of Section IC3(D)(I) of schedule D of the association’s bylaws (NASDAQ Volume Reporting).
Fined $1,000 for Alleged Supervisory Failures In Making Bona Fide Public Offerings In The Distribution Of 17 Hot Issues
Overview from FINRA’s Disciplinary Office:
Allegations of failure to make bona fide public offerings in the distribution of 17 “hot issues” in violation of Article III, Section 1 “free-riding”.
Fined $250 for Allegedly Violating A Rule Regarding Free-Riding And Withholding (Docket/Case Number: SC-30)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of its rule concerning free-riding and withholding.
Fined $5,000 for Alleged Supervisory Failures In Reviewing and Monitoring Customer Account Activity (Docket/Case Number: C07000041-AWC)
Overview from FINRA’s Disciplinary Office:
NASD Rule 3010 – Respondent member failed to maintain adequate written supervisory procedures pertaining to the review and monitoring of customer account activity in violation of NASD Rule 3010 whereby a former registered representative of respondent member firm made recommendations to a public customer involving the purchase of corporate and municipal bonds on margin. Although the margin interest charged by respondent member exceeded the bond yield. The recommendation was unsuitable for the customer based on her age, investment experience, financial condition and investment objectives, but respondent member’s written supervisory procedures were inadequate to detect and prevent such unsuitable recommendations by its registered representative.
Fined $8,000 for Alleged Supervisory Failures In Complying With Licensing Provisions (Docket/Case Number: 2000-99-038)
Overview from FINRA’s Disciplinary Office:
New Mexico Secretary of State alleged violations of certain licensing provisions of the New Mexico Securities Act of 1986.
Fined $200,000 for Alleged Supervisory Failures In Overseeing And Controlling Business Activities, Engaging In Inconsistent Conduct, And Violation Of NYSE Rule (Docket/Case Number: HPD# 00-187)
Overview from FINRA’s Disciplinary Office:
**09/19/2000** Stipulation and consent to penalty filed by NYSE division of enforcement and pending consented to findings: without admitting or denying guilt, the firm consents to: A. findings by the hearing panel that it: 1. Violated Exchange Rule 342(A) and (B) in that it failed reasonably to supervise and control the business activities of the firm and its employees, to provide for appropriate procedures of supervision and control of the business activities of the firm and its employees, and to establish a separate system of follow-up and review to assure compliance with applicable exchange rules and federal securities laws and regulations with respect to the sale of callable CDs and the public dissemination of research reports; 2. Engaged in conduct inconsistent with just and equitable principles of trade in that, on one or more occasions, it: (I) recommended and sold a security to one or more customers which was unsuitable in view of the customer’s age, investment objectives and/or financial resources, and II) made misrepresentations to one or more customers, and/or omitted to disclose facts necessary in order to make the statements made not misleading to one or more customers, in connection with the solicitation and/or sale of a security to the customer; 3. Violated Exchange Rule 472.30 in that, on one or more occasions, it utilized communications which contained misstatements and/or omissions of material facts, and 4. Violated Exchange Rule 472.40 in that, on one or more occasions, it utilized research reports recommending the purchase or sale of a specific security which failed to disclose or inaccurately disclosed: (I) that the firm made a market in the security being recommended; (II) that the firm was manager or co-manager of the most recent public offering of a security of the recommended issuer; (III) the date of the communication; and (IV) that a firm employee served on the boards of directors of two corporations whose securities **continued in #13**
Fined for Allegedly Selling Debentures Despite Misleading Registration Statement And Negative Press (Docket/Case Number: 85-3078)
Overview from FINRA’s Disciplinary Office:
Allegations that applicant violated the Securities Act of 1933 in an underwriting pursuant to a shelf registration of debentures of D.H. Baldwin Co. In 1982, by continuing to sell the Securities pursuant to a false and misleading reg. Statement after adverse information appeared in the press about the issuer.
Fined $5,000 for Alleged Supervisory Failures Allowing Representative To Engage In Unsuitability, Lack Of Due Diligence, Falsifying New Account Forms, And Distribution Of Unapproved Information (Docket/Case Number: 92-133)
Overview from FINRA’s Disciplinary Office:
A charge memorandum was filed against Mr. Isaac Franklin Stevens CRD#827523 and applicant alleging unsuitability, lack of diversification, misstatements, lack of due diligence, falsifying new account forms, and distribution of unapproved information on the sale of securities to 8 customers. No specific action requested.
Fined for Allegedly Misrepresenting Complaints From Clients (Docket/Case Number: 91-0004CD)
Overview from FINRA’s Disciplinary Office:
Allegations of misrepresentations respecting complaints received from clients of its Marion, Indiana Branch Office concerning sales presentations for mutual funds regarding the risk of loss.
Fined $10,000 for Alleged Untrue Statements, Fraud, Inequitable Business Practice, and Omission of Material Facts (Docket/Case Number: 85-89)
Overview from FINRA’s Disciplinary Office:
Allegations in regard to the sale of D.H. Baldwin debentures include: untrue statements in violation of IL Sec. Law of 1953, fraud, inequitable business practice, and omission to state material facts. State filed notice of hearing to determine whether applicant and 9 IR’s should have IL registrations revoked or suspended.
Fined $43,000 for Allegedly Entering A Settlement Agreement (Docket/Case Number: SEU-98-014)
Overview from FINRA’s Disciplinary Office:
HI entered into settlement agreement with Jones regarding cease and desist order issued on 09/18/98. Settlement AGMT requires Jones to rescind and pay $43,000.00 to customer and pay $12,500.00 to HI for reimbursement of administrative costs.
Fined $1,000 for Allegedly Executing Short Sales Of Common Stock (Docket/Case Number: CMS960137AWC)
Overview from FINRA’s Disciplinary Office:
Allegations that applicant mistakenly executed short sales of a common stock when the previous inside quotes happened to be downticks in violation of NASD Conduct Rule 3350.
Fined $50,000 for Allegedly Unlawfully Charging Commissions In Repurchasing Interests (Docket/Case Number: RELS. 34-38880; IC-22767; File #3-9181)
Overview from FINRA’s Disciplinary Office:
+04/20/2001+ ** 11-08-96, SEC news digest issue #96-213, dated 11/07/1996, enforcement proceedings and administrative proceeding rel. #34-37926, dated 11/06/1996, discloses: The Commission announced today the institution of public administrative cease-and-desist proceedings, pursuant to Sections 15(B), 19(H) and 21C of the Securities Exchange Act of 1934 and Sections 9(B) and 9(F) of the Investment Company Act of 1940, against Edward D. Jones & Co., (Jones & Co.), a registered broker-dealer. The order instituting proceedings alleges that Jones & Co. unlawfully charged commissions in repurchasing interests in three unit investment trusts from Jones & Co. customers, profiting by approximately $120,000. As a result, the order alleges that Jones & Co. violated Rule 22C-1 promulgated under the Investment Company Act in that Jones & Co. repurchased the interests at a price which was not based on the current net asset value of the UIT interests. A hearing will be held to determine whether the allegations in the order are true and to determine what remedial sanctions, if any, are appropriate and in the public interest. (Rel. 34-37926; IC- 22316)
Fined for Allegedly Offering And Selling Securities To Illinois Residents Through Representations, Omissions, and Fraud (Docket/Case Number: 88-142)
Overview from FINRA’s Disciplinary Office:
Respondents Edward D. Jones & Company, Inc. and others offered and sold securities to Illinois residents by means of misrepresentations, omissions, fraud or artifice under the Illinois Securities Law of 1953, as amended the “law”), subjecting respondents to registration revocation in Illinois. Authority: Sections 8.E(1)(F), 12.B, 12.F, 12.G, and 12.J of the law.
Fined $40,000 for Allegedly Violating NYSE Rules (Docket/Case Number: HPD 94-166)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of NYSE Rule 351 (A)(failure to promptly report certain events); NYSE Rule 345.17(B) (Failure to timely amend certain forms U-5); and NYSE rule 342(A) & (B) (failure to establish appropriate procedures for control of these reporting requirements)
Fined $3,500 for Allegedly Transacting Business Through An Unregistered Branch Office (Docket/Case Number: 93-058-S)
Overview from FINRA’s Disciplinary Office:
Transacted business through an unregistered branch office and failure to provide notification relative to branch office changes. Re: 9 VSA 4214 and Policy 92-3-S.
Fined $15,000 for Alleged Temporary Operation Of Unapproved Branch Office Locations (Docket/Case Number: 92.133.DOS)
Overview from FINRA’s Disciplinary Office:
Allegation of violation of the Florida Sec. & Investor Protection Act, with regards to the temporary operation of 6 branch office locations for which it had assigned Florida licensed representatives and had submitted pending applications to the department, but for which it had not yet received approval from Florida.
Fined $1,000 for Alleged Supervisory Failures In Submitting Reports On Time (Docket/Case Number: MS-1104-AWC)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of Part VI, Section 5(A) of schedule D for failure to give timely volume reporting in connection with certain activities as a NASDAQ market maker.
Fined $1,750 for Alleged Supervisory Failures In Submitting Reports On Time (Docket/Case Number: MS-973(A)-AWC)
Overview from FINRA’s Disciplinary Office:
Allegation of violation of Part VI, Section 5(A) of schedule D for failure to give timely volume reporting in connection with certain activities as a NASDAQ market maker.
Fined $5,000 for Alleged Supervisory Failures Allowing Unregistered Personnel To Effect Or Attempt To Effect Securities Transactions (Docket/Case Number: 1988-7-82)
Overview from FINRA’s Disciplinary Office:
Complainant alleged violations of the Idaho Securities Act in that respondent Edward D. Jones & Co. allowed unregistered personnel to effect or attempt to effect securities transactions for which they are required to be registered.
Fined $1,000 for Allegedly Approving A Misleading Advertisement (Docket/Case Number: KC-444)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of Article III, Sections 1 and 35 of the rules of fair practice for approving an advertisement found to be misleading.
Fined $900 for Allegedly Violating Its Rule Concerning Free-Riding And Withholding (Docket/Case Number: KC-292-SC)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of its rule concerning free-riding and withholding.
Fined $50 for Allegedly Failing To Settle Obligations On Time (Docket/Case Number: D-MSE-80-76)
Overview from FINRA’s Disciplinary Office:
Allegations of violation of a requirement that settlement obligations by paid in clearing house funds on settlement date or in federal funds on the next business day following settlement date.
Fined $18,369 for Allegedly Engaging In Unlicensed Sales Activity (Docket/Case Number: 8704-2)
Overview from FINRA’s Disciplinary Office:
Respondent member firm engaged in unlicensed sales activity over the past three (3) years.
Fined $3,230 for Allegedly Violating Its Rule Concerning Free-Riding And Withholding (Docket/Case Number: KC-291)
Overview from FINRA’s Disciplinary Office:
Allegations of violations of NASD Rule concerning free-riding and withholding.
Next Steps and Free Consultation with Our Legal Team
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We can help you, as we have helped hundreds of other clients in the past. We are happy to serve you as well as to provide you with a custom report of your advisor’s and your brokerage firm’s complaints.