Edward Jones Co. L.P. a securities broker dealer headquartered in Saint Louis Missouri has been censured and fined $40,000.00 by Financial Industry Regulatory Authority (FINRA) based upon findings that the firm lied about the amount of compensatory damages sought by customers who brought investment related disputes against the firm. Letter of Acceptance Waiver and Consent No. 2018056422401 (June 19, 2019).
According to the AWC, the firm was required under FINRA Rule 1122 to provide accurate information within FINRA Form U4, which, among other things, covers information about customer initiated investment related disputes lodged against the firm. Particularly, the Form U4 called upon the firm to state the specific amount of compensatory damages which were alleged by the customers. Apparently, this information was relied upon by FINRA to determine what action should be taken by the regulator in regard to the complaints lodged by Edward Jones’ customers.
Evidently, between April of 2016 and March of 2018, a total of one hundred fifty-eight Forms U4 had been filed by Edward Jones where the documentation made reference to a customer dispute. Critically; however, one hundred fourteen of those filings Edward Jones made contained misrepresentations of the amount in controversy. In particular, customers indicated in seventy-nine of the disputes that they sought damages exceeding $5,000.00; however, this was not reflected in the filings.
FINRA noted that in one case, a customer requested $93,139.00 in damages founded on allegations of the firm’s misconduct, but the firm simply stated that the damages were $5,000.00 or more while also representing that the firm could not determine the amount. In another case, a customer reportedly sought an astounding $630,000.00 in damages based upon accusations of the customer having been charged unwarranted, excessive sales charges and fees. Yet, Edward Jones reported that it could not determine the amount alleged by the customer while also stating that the damages were $5,000.00 or more.
Evidently, Edward Jones’ associates failed to comprehend the basic requirements about disclosing accurate information in reference to customers’ complaints. Because of Edward Jones’ associates lacking competence in regards to this information, it caused Edward Jones to portray customers’ disputes as being significantly less serious than they actually were. FINRA found the firm’s submission of false information regarding customer complaints to be violative of FINRA Rules 2010, 1122 and FINRA By-laws Article V, Section2.
