Edward Jones & Co.
The Securities and Exchange Commission, the NASD, and the NYSE fined Edward Jones $75 million for failures to supervise and failure to adequately disclose revenue sharing payments that it received from a group of mutual fund families that it recommended to customers. According to the SEC, Edward Jones entered into revenue sharing arrangements with certain fund families and told investors that it promoted these funds because of quality of the funds. Edward Jones failed to disclose that it received millions of dollars from the funds each year and reportedly provided these fund families with exclusive “shelf space” to market the funds. The NASD also charged Edward Jones with holding unlawful sales contests promoting these mutual funds. Winning brokers could choose a trip from 35 “world class” vacation destinations. The contests rewarded airfare, five-star accommodations and activities including skiing, golfing, fine dining and tours.