FINRA has slammed 12 firms with more than $2.6 million in fines and ordered them to pay restitution totaling more than $4 million for failing to apply available sales charge discounts to customers' purchases of unit investment trusts. Seven of the 12 firms were bank broker-dealers or third-party marketers that partner with banks.
FINRA alleged that the firms failed to develop and implement procedures to ensure customers received appropriate discounts for their investments.
"Firms need to ensure that their registered representatives are providing customers the sales charge discounts to which they are entitled," Brad Bennett, FINRA's chief of enforcement, said in a statement. "The firms sanctioned today failed to provide these discounts, resulting in customer harm in the form of higher costs for which customers have been or will be reimbursed."
A unit investment trust is a type of investment that offers redeemable units of a generally fixed portfolio that terminate on a specific date. Their sponsors generally offer sales charge discounts to investors, known as "breakpoint discounts" or "rollover and exchange discounts."
In their settlements with FINRA, the firms neither admitted nor denied the charges, but consented to an entry of FINRA's findings.
The seven bank broker-dealers and third-party marketing firms that were sanctioned were:
- Cetera Advisor Networks of El Segundo, Calif., was ordered to pay $151,108 in restitution and fined $150,000
- Comerica Securities of Detroit was ordered to pay $197,757 in restitution and fined $150,000
- Fifth Third Securities of Cincinnati was ordered to pay $663,534 in restitution and fined $300,000
- First Allied Securities of San Diego was ordered to pay $689,647 in restitution and fined $325,000
- Huntington Investment Co. of Columbus, Ohio, was ordered to pay $60,973 in restitution and fined $75,000
- Infinex Investments of Meridian, Conn., was ordered to pay $109,627 in restitution and fined $150,000
- Securities America of La Vista, Neb., was ordered to pay $477,686 in restitution and fined $275,000
The other firms were:
- Ameritas Investment Corp. of Lincoln, Neb., was ordered to pay $128,544 in restitution and fined $150,000
- Cetera Advisors of Denver was ordered to pay $452,622 in restitution and fined $250,000
- Commonwealth Financial Network of Waltham, Mass., was ordered to pay $357,521 in restitution and fined $225,000
- Park Avenue Securities of New York was ordered to pay $443,255 in restitution and fined $300,000
- MetLife Securities of New York was ordered to pay $349,748 in restitution and fined $300,000
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