FINRA sanctioned three broker-dealers for failing to apply sales charge discounts for eligible volume purchases of unit investment trusts (UITs), doling out fines and orders of restitution totaling over $1.2 million. Next Financial Group Inc., Key Investment Services and Stephens Inc. also received citations for supervisory failures related to their respective failures in identifying and/or applying the discounts.
Regulatory staff ordered fines and restitution according to the following schedule:
Next Financial Group Inc.: $125,000 Fine / $216,000 in Restitution = $341,000 total penalty.
Key Investment Services: $100,000 Fine / $100,000 in Restitution = $200,000 total penalty.
Stephens Inc.: $235,000 Fine / $459,000 in Restitution = $694,000 total penalty.
FINRA previously censured, fined and ordered restitution from six firms for failing to apply discounts to eligible non-traded REIT purchases and cited Barclays Capital for failing to provide eligible Class A share mutual fund discounts, while in 2012, FINRA fined UVEST Financial Services Group, Inc. $230,000 plus remediation to customers after UVEST failed to provide UIT sales charge discounts.
In the UVEST overcharging action, FINRA noted that the firm—similar to Next Financial, Key Investment and Stephens—relied on a deficient or otherwise unsatisfactory supervisory system or procedures, which contributed to the oversight and failures to apply the sales charge discounts.
If you have invested with Next Financial Group, Key Investment Services, Stephens Inc. or with any broker, financial adviser or firm who has failed to provide or offer a sales charge discount to which you were entitled, and such a failure has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.
News: Finra cracks down on firms for missing discounts on UIT sales (Investment News)