BB&T fined $100,000 for failing to disclose wrap-fee conflicts

SEC says bank customers were directed to affiliated programs

Sep 11, 2018 @ 12:47 pm

By Jeff Benjamin

The Securities and Exchange Commission has fined BB&T Investments $100,000 for failing to disclose to clients certain conflicts of interest related to the sale of wrap-fee programs to banking customers.

The suit states that from March 2012 through July 2015 BB&T advisers were engaged in the business of recommending to clients investments in wrap-fee programs sponsored by three investment advisers, one of whom was an affiliate of BB&T Investment Services.

(More: Finra says BB&T overcharged retirement plans, charities)

The SEC found that BB&T failed to disclose sufficient facts to enable clients to determine that the compensation arrangement between BB&T Investment Services and the affiliated adviser created an incentive for BB&T Investment Services and its representative to invest in one wrap fee over the two other options.

In addition to the fine, BB&T has since reimbursed affected clients for termination fees in the amount of $635,535.

(More: SEC slaps Lockwood with $200,000 fine over unseen trading costs in wrap accounts)

"At BB&T, the best interest of our clients continues to be our number one priority," Brian Davis, BB&T director of corporate communications, wrote in a statement. "After reviewing this issue back in 2015, we promptly eliminated the early termination fee and reimbursed all termination fees to clients at that time. BB&T also took measures to prevent any further occurrences."


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