SEC fines SunTrust for recommending higher-cost fund shares

Using institutional shares would have saved investors $1.1 million, agency says.
SEP 14, 2017

The Securities and Exchange Commission has charged a unit of SunTrust Banks with improperly recommending more expensive share classes of various mutual funds when cheaper shares of the same funds were available, costing investors more than $1.1 million in avoidable fees. SunTrust Investment Services has agreed to pay a penalty of more than $1.1 million to settle the charges, the SEC said in a release, noting that SunTrust began refunding the overcharged fees plus interest to more than 4,500 affected client accounts after the SEC started its investigation. SEC examiners cited the practice during a compliance review of the firm in mid-2015. According to the SEC's order, the Atlanta-based firm breached its fiduciary duty to act in clients' best interests by recommending and purchasing costlier mutual fund share classes that charge 12b-1 fees. Investors were not informed that they were eligible for less costly share class options that did not charge those fees, which flowed back to SunTrust in the form of higher commissions from the funds.

Latest News

Trump wants to scrap one of private equities' tax breaks, again
Trump wants to scrap one of private equities' tax breaks, again

Exemption enjoyed by PE and VC firms was under fire in his first term too.

CFTC's Pham fires person leading investigation into her
CFTC's Pham fires person leading investigation into her

Sources claim replacement is the commission’s diversity chief.

Why financial honesty is key to harmonious relationships
Why financial honesty is key to harmonious relationships

Nearly half of single Americans think their net worth shapes their fate in dating, but the biggest financial green flags tell a different story.

Osaic hit with class action over cash sweep payments
Osaic hit with class action over cash sweep payments

The hybrid RIA is the latest firm to face allegations that it enriched itself at customers' expense by paying unfairly low interest rates in its cash sweep programs.

LPL's Rich Steinmeier turns the page on CEO firing with eye on firm's growth
LPL's Rich Steinmeier turns the page on CEO firing with eye on firm's growth

Installed after Dan Arnold's abrupt termination, the new leader at LPL Financial is highlighting the firm's refocusing on the individual advisor.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.