Brokerages in New Mexico are obligated to pay a settlement due to exploitative fees on small-scale transactions.
State securities regulators, led by the North American Securities Administrators Association (NASAA), have announced a multistate settlement with Edward Jones, LPL Financial, RBC Capital Markets, Stifel, and TD Ameritrade. The settlement stems from allegations that these brokerage firms charged unreasonably high commissions and fees on small-dollar equity transactions over a five-year period.
## Key Details of the Settlement
The settlement involves five major firms, who are accused of violating state securities laws by charging excessive commissions on small principal equity trades, particularly affecting retail investors making low-value transactions. Over 1.12 million trades were affected, with about $19 million in excessive commissions charged over five years.
Under the terms of the settlement, the firms will pay affected customers restitution, plus 6% interest from the date of the transaction through the settlement date. Additionally, the firms will pay a fine to each settling state, with New Mexico receiving $175,000.
## Regulatory Oversight and Policy Changes
The investigation was led by NASAA and state regulators, who found that the firms failed to ensure their commission practices were fair and reasonable. As a result, each firm will implement safeguards to prevent excessive charging fees in the future.
Edward Jones, one of the firms involved, has cooperated fully with the investigation and expressed its commitment to integrity, transparency, and strengthening its processes to foster a culture of compliance.
## Impact and Implications
Many affected investors were charged commissions well above the 5% benchmark, especially on small-dollar transactions. The settlement aims to compensate affected customers and deter similar practices in the future, with regulators emphasizing the importance of protecting retail investors from unfair pricing.
Benjamin Schrope, the New Mexico Securities Division Director, stated that the first concern was making sure impacted clients received proper restitution. He encourages anyone who might be afraid they are impacted to reach out to the Securities Division for assistance.
For general questions or concerns, individuals can email web@our website. New Mexico residents who have been affected or have questions regarding the settlement can contact the Securities Division.
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[1] NASAA Press Release, "Multistate Settlement with Five Broker-Dealers Over Unfair Commissions on Small-Dollar Equity Trades," 21 March 2023, [2] New Mexico Securities Division Press Release, "New Mexico Joins Multistate Settlement with Edward Jones, LPL Financial, RBC Capital Markets, Stifel, and TD Ameritrade," 21 March 2023, [3] Edward Jones Press Release, "Edward Jones Settles Multistate Investigation," 21 March 2023,
- The business settlement with Edward Jones, LPL Financial, RBC Capital Markets, Stifel, and TD Ameritrade, worth $19 million, was initiated due to allegations of excessive commission charges on small-dollar equity transactions, as reported in the business news.
- The personal-finance implications of the settlement involve affected customers receiving restitution, plus 6% interest, after these firms were found to be in violation of state securities laws for charging unreasonably high fees, as per the announcement by the North American Securities Administrators Association (NASAA).
- The settlement, aimed at deterring similar practices in the future, has emphasized the importance of investing with integrity and transparency, lessons that stand crucial in the world of finance and business.
