FINRA Fines Edward Jones for Underreporting Complaints, Damages

Attorney Advising Disclaimer

After finding that Edward D. Jones & Co failed to report the full extent of customer complaints and claimed damages from 2016-2018, FINRA censured and fined the firm $40,000, writing that Edward Jones underreported damages to customers by failing to accurately portray certain customer disputes and complaints in which clients alleged damages in excess of $5,000.

FINRA wrote that Edward Jones underreported damages in at least 79 customer complaint disclosures, which comprised 69% of the 114 cases where Edward Jones had indicated an alleged compensatory damage amount of $5,000.

For instance, one such customer complaint that Edward Jones purportedly underreported as $5,000 in damages actually sought $93,139 in damages for alleged excessive sales of securities—that's an amount 18 times greater than what Edward Jones reported.

In another case, a customer sought damages of $630,000 for excessive fees and sales charges—$625,000 greater than what Edward Jones had reported.

Edward Jones had maintained that those amounts—such as the aforementioned $93,139 or $630,000—could not be determined ("cannot determine amount"), despite the fact that the customers' complaints in those 79 cases had indeed specified amounts of damages that exceeded $5,000.

FINRA wrote that the inaccurate Form U4 filings resulted from a "misunderstanding" on the part of Edward Jones personnel about the requirements for disclosing customer complaints.

Although the mistake may have stemmed from a repeated innocent misunderstanding, disclosure failures and underreporting of damages or other disclosure failures can produce real-world negative consequences. For instance, reporting damages of $5,000 when the actual alleged amount was $630,000 corresponds to an underreporting of 12,600%.

If you have invested with Edward Jones or with any firm, broker, or financial adviser whose failure to disclose material information about securities products or whose failure to accurately portray the extent of damages claimed and allegations against a registered representative has proven harmful to your investments or interests, please call our experienced FINRA arbitration attorneys at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.