FOR IMMEDIATE RELEASE FROM
THE WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS

Friday, Jan. 10, 2025

CONTACT:    
Lyn Peters, DFI Director of Communications
PH 360-902-8731, [email protected]

Bill Beatty, DFI Division of Securities Director,
PH 360-902-8760, [email protected]

Washington DFI Joins $17 Million Multi-State Enforcement Settlement With Edward Jones

Multi-State Working Group Finds Supervisory Failures With Respect to Class A Mutual Fund Shares

Olympia – The Washington State Department of Financial Institutions (DFI) Securities Division joined a $17 million settlement with Edward D. Jones & Co., L.P. (Edward Jones). The settlement is a result of an investigation by DFI and other members of the North American Securities Administrators Association (NASAA). The regulators investigated the broker-dealer’s supervision of customers paying front-load commissions for Class A mutual fund shares in light of later moving brokerage assets into fee-based investment advisory accounts.

A working group of 14 state securities regulators led the four-year investigation. The group looked into Edward Jones’s supervision of customers moving from brokerage to advisory accounts in light of the 2016 U.S. Department of Labor (DOL) Fiduciary Rule making investment advice to retirement accounts subject to a fiduciary standard of care.

The investigating group found that Edward Jones charged front-load commissions for investments in Class A mutual fund shares in situations where the customer sold or moved the mutual fund shares sooner than originally anticipated. The states also found gaps in Edward Jones’s supervisory procedures in this respect.

“In partnership with NASAA and other state securities regulators, DFI will continue to protect investors and ensure that companies operating in Washington State follow our securities laws,” DFI Director Charlie Clark said. “Firms that offer both brokerage and investment advisory services should be mindful that customers are receiving the services the customer wants at an appropriate price.”

As part of the settlement, Edward Jones will pay each of the 50 states, Washington, D.C., the U.S. Virgin Islands, and Puerto Rico an administrative fine of approximately $320,000. As a member of the working group, Washington DFI will receive an additional $15,000 for investigative costs. In evaluating the supervisory failures and determining the appropriate resolution, the states considered certain facts such as the positive performance of the investment advisory accounts as compared to the brokerage accounts.

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About DFI ▪ www.dfi.wa.gov ▪ 360-902-8700 ▪ 877-RINGDFI (746-4334)
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information: www.twitter.com/DFIConsumers ■ https://dfi.wa.gov/financial-education/blog ■ https://www.youtube.com/user/WADFI ■ www.homeownership.wa.gov ■ www.instagram.com/wastatedfi/ ■ www.linkedin.com/company/state-of-washington-department-of-financial-institutions/

About the Division of Securities ▪ www.dfi.wa.gov/sd ▪ 360-902-8760 ▪ 877-746-4334
The Division of Securities regulates securities investments, franchises, business opportunities, and off-exchange commodities sold in Washington and the firms and individuals that sell these products or provide investment advice. The Division handles complaints, conducts investigations, and takes appropriate enforcement actions to protect investors and combat fraud.

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