Broker-Dealer Edward D. Jones & Co. Consents to FINRA Sanctions to Resolve Allegations of Misreporting Damage Amounts of Customer Complaints on Forms U4Wednesday, July 10, 2019
On June 19, 2019, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement imposed sanctions against Edward D. Jones & Co., L.P. (Edward Jones), a retail broker-dealer that, as of May 2019, had nearly 22,000 registered employees and 13,925 branch offices, for allegedly violating securities industry rules.
In the Letter of Acceptance, Waiver and Consent (AWC), FINRA Department of Enforcement alleges that Edward Jones understated alleged damages in 79 customer complaints from April 2016 to March 2018. During this time, Edward Jones allegedly filed 114 Forms U4, the means by which brokerage firms report certain information about their associated registered employees, and stated on 79 of these cases that the customer’s complaint alleged compensatory damage of “$5,000 or more/cannot determine amount.” Some complaints that sought damages of up to $630,000 for commissions gained on allegedly unsuitable transactions or excessive sales of securities.
When FINRA Department of Enforcement identified the inaccuracies, which they believe resulted from a misunderstanding by certain firm associates about the applicable requirements for complaint disclosures, Edward Jones promptly updated the Form U4s to reflect the correct damage amounts specified in the customer complaints. The firm also provided additional training to its associates and instituted additional oversight on its process of disclosing customer complaints.
Based on the foregoing, Edward Jones violated FINRA Rules 1122 and 2010. To resolve these allegations, Edward Jones consented to a censure and $40,000 fine.
If a broker was not properly supervised while registered at a brokerage firm, the firm can be held liable for the broker’s misconduct. Did you invest with a broker at Edward D. Jones & Co., L.P. and lose money? If so, you may be able to recover from the broker or the firm. Since 1998 we have been representing victims of investment fraud and broker misconduct. Call us (1-877-410-8172) today for a free, no obligation consultation.