H&R Block Financial Services
New York Sues H&R Block Over “Express IRA”
In 2006, then New York Attorney General Eliot Spitzer sued H&R Block in connection with the sale of the H&R Block Express IRA. The allegations included that the IRA product earned less money for customers than the fees paid by the customers. The complaint accused H&R Block of fraudulent business practices, deceptive acts and practices, fraud and breach of fiduciary duty. The company denied the charges and said it would fight the charges in court.
NASD Charges H&R Block With Enron Bond Fraud
The NASD charged H&R Block Financial Advisors, Inc., with fraud in the sale of millions of dollars worth of Enron Corporation bonds just weeks before Enron declared bankruptcy but there had been public disclosures of Enron’s financial condition and after its bond ratings had begun to collapse. H&R Block reportedly recommended and sold more than $16 million worth of Enron bonds to more than 800 customers in approximately 40 states. Meanwhile, the claim states that H&R Block paid its brokers special incentives to sell the bonds. H&R Block customers who invested in the bonds lost substantially all of their investment. The NASD charged stated that some H&R Block brokers stated that the Enron bonds were safe, that Enron was a large company that could not or would not fail, and that Enron’s credit rating was higher than it actually was. H&R Block was also charged with failing to establish and maintain an adequate supervisory system to monitor the sales of the Enron bonds.