In Focus
March 2, 2004
he NASD and SEC have placed a spotlight on brokerage firms that not just overcharged investors commissions on mutual fund sales, but did so excessively, compared to the average overcharge. The regulators estimated that "most" firms overcharged, and that the overcharge occurred about 20% of the time (1 out of every 5 customers), causing commissions overcharges ranging from $243 to $10,000.
These 15 "outlier" brokerage firms recently settled with the NASD and/or the SEC for more than $21.5 million in fines for 2001 and 2002 commission fund overcharges. Here is the list of the firms, their fines imposed, and the percentage of times that the firms overcharged their customers:
The Firms settling with the SEC and NASD in separate actions are:
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Wachovia Securities, LLC
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$4,844,465
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28.77%
|
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UBS Financial Services Inc.
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$4,621,768
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30.03%
|
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American Express Financial Advisors Inc.
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$3,706,693
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29.70%
|
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Raymond James Financial Services, Inc.
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$2,595,129
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31.78%
|
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Legg Mason Wood Walker, Inc.
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$2,315,467
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34.61%
|
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Linsco/Private Ledger Corp.
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$2,232,805
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35.64%
|
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H.D. Vest Investment Securities, Inc.
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$725,216
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33.39%
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The Firms settling with the NASD only are:
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Bear, Stearns & Co. Inc.
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$280,469
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52.00%
|
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Lehman Brothers Inc.
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$123,882
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59.96%
|
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Cresap, Inc.
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$99,458
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88.48%
|
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SWS Financial Services
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$66,468
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89.69%
|
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Kirkpatrick, Pettis, Smith, Polian Inc.
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$39,935
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53.56%
|
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Southwest Securities, Inc.
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$36,971
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89.02%
|
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David Lerner Associates, Inc.
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$32,711
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64.88%
|
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Brecek & Young Advisors, Inc.
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$31,224
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53.74%
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The message to firms (according to the SEC): exercise due care, or face substantial penalties!
— James J. Eccleston
FinancialCounsel.com
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