Wells Fargo and Merrill Lynch settle excessive commissions probe

Wells Fargo and Merrill have agreed to a combined $4.4 million settlement with state securities regulators over charges of unreasonable commissions on small-dollar retail equity transactions, the North American Securities Administrators Association (NASAA) has announced.

The investigation, led by Massachusetts and joined by regulators in Alabama, Iowa, Missouri, Montana, New Jersey, Texas, and Washington, found that Wells Fargo Clearing Services, LLC, Wells Fargo Advisors Financial Network, LLC, and Merrill Lynch charged unreasonable commissions on more than 256,000 equity transactions nationwide over a five-year period, according to NASAA.

The two Wells Fargo entities will pay restitution on nearly $3.9 million in excess commissions across approximately 228,243 transactions - from September 30, 2020, through October 1, 2025 - while Merrill Lynch faces restitution on approximately $549,000 in excess commissions over the same period, NASAA said. Affected customers in participating states will receive restitution plus interest. All three firms must also pay administrative fines and investigation costs.

As a condition of the settlement, the firms must certify that their commission policies and supervisory procedures have been revised to ensure all charges are fair and reasonable going forward.

"This settlement reinforces the responsibility of financial firms to review their practices and ensure customers are treated fairly. I commend the state regulators involved for their thorough work in bringing this matter to resolution," said Elizabeth Bowling, NASAA President.

The action follows a series of similar NASAA-led settlements with major broker-dealers over minimum commission practices, including a $13 million settlement with Raymond James in July 2023 and a $9.3 million settlement with Edward Jones, LPL Financial, RBC Capital Markets, Stifel, and TD Ameritrade in June 2025.