FINRA fines big brokerages $2.4 million

Divisions of Merrill Lynch, UBS and Prudential were charged with improper mutual fund sales and failures of supervision.

The Financial Industry Regulatory Authority meted out $2.4 million in fines to five prominent brokerages.
Divisions of Merrill Lynch, UBS and Prudential were charged with improper mutual fund sales and failures of supervision.
The firms conducted improper sales of class B and C mutual fund shares, and failed to provide customers the opportunity to purchase class A shares at net asset value, according to a statement released by FINRA.
FINRA leveled an $800,000 fine against Prudential securities and a $750,00 fine against UBS Securities for improper sales of class B and C shares.
A $100,000 fine was directed at Prudential’s Prucco Securities for improper sales of Class B shares.
“We are pleased that through these settlements, millions of dollars will be retuned to customers,” said Susan L. Merrill, Executive Vice President and Chief of enforcement for FINRA, in a statement released by the organization on Thursday.

Merrill Lynch, along with Prudential and Prucco were also fined an $250,000 each for failing to maintain responsible supervisory systems to allow customers to obtain sales charge waivers through NAV transfer programs.
The firms in question have also agreed to remuneration plans to repay customers who did not receive the benefits of NAV transfer programs, even though they were eligible.
Another firm, Wells Fargo investments, was found to have participated in the same practices, but was not fined because the company has already taken steps to retroactively correct their mistakes, already returning $612,000 in funds to investors in Class A shares.