Brokerage Firm Misconduct

The SEC and the NASD have continued to fine large brokerage firms for improper mutual fund practices.

It has been discovered that many large brokerage firms had secret agreements with different mutual fund families. The brokerage firms would advertise and promote limited mutual fund families calling them either the “preferred families” or the “recommended families”. The brokerage firms misrepresented that these specific mutual fund families continued to provide better mutual fund performance and returns as the reason for promoting them when in reality, the reason for promoting these mutual fund families was because those families paid extra incentives back to the brokerage firms. With respect to Edward Jones Mutual Funds sales more than 95% of those sales were made in their limited seven “preferred families” of funds. The failure to disclose to investors this specific payback arrangement resulted in investors being unaware that Edward Jones had a strong motivation to recommend the purchase of the preferred families to the exclusion of the other fund families regardless of the investors’ particular need.

What you can do:

If you have lost money while investing with Edward Jones, American Express or any of the other brokerage firms who failed to disclose these hidden incentives, please contact one of our skilled investment fraud attorneys. We can determine whether or not you can recover for your mutual fund losses. Click here to contact us for a free case evaluation.

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