Triad Advisors, a Norcross, Ga.,-based broker, has agreed to pay more than $200,000 in fines and restitution for failing to give some of its customers sales charge discounts on unit investment trusts, according to a settlement letter with the Financial Industry Regulatory Authority Inc.
The firm, which has 838 registered representatives and 328 branch offices, has consented to be censured and to pay $125,000 in fines and $102,632 in restitution, according to the settlement letter. It did not admit or deny the findings.
Triad Advisors did not respond to a request for comment.
According to Finra, the firm failed to apply sales charge discounts to clients' unit investment trusts, or UITs, between May 2009 and April 2014, and did not have a supervisory system in place or appropriate supervisory procedures to oversee these transactions.
Triad did not apply sales charge discounts to 1,088 eligible UIT purchases, resulting in excessive sales of $102,631, the letter stated. Advisers can reduce the sales fee charged on a UIT by “breakpoints,” such as increasing the size of their investments, or through discounts on rollovers and exchanges, known as sales charge discounts.
Triad did not have a supervisory system in place to identify and apply these discounts before May 2012. At that time the system identified only breakpoints and not sales charge discounts, which accounted for more than 85% of Triad's missed discounts, Finra stated.