Maryland Joins $17 Million Multistate Settlement with Edward Jones Over Supervisory Failures

Maryland has reached an agreement with Edward D. Jones & Co., L.P. as part of a $17 million multistate settlement addressing supervisory shortcomings related to mutual fund transactions. The settlement involves all 50 states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands, following a four-year investigation led by a coalition of state securities regulators.

The investigation focused on Edward Jones’s handling of customer accounts transitioning from brokerage services to fee-based advisory accounts. Regulators examined the company’s practices after the introduction of the 2016 U.S. Department of Labor Fiduciary Rule, which imposed stricter standards on investment advice for retirement accounts. Findings revealed that the firm charged front-load commissions for Class A mutual fund shares, even when customers moved or sold their investments earlier than expected, highlighting lapses in supervisory oversight.

In light of these findings, the settlement includes a $320,000 administrative fine for each participating jurisdiction. While the investigation noted positive performance outcomes for advisory accounts compared to brokerage accounts, the identified supervisory deficiencies prompted regulatory action to safeguard investors and maintain market integrity.

Maryland Attorney General Anthony G. Brown emphasized the importance of upholding investor protections and ensuring financial institutions act in their customers’ best interests. The settlement underscores a commitment to holding firms accountable for regulatory compliance and aligning their practices with fiduciary standards.

Article by multiple RFHC contributors.

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