Multijurisdictional Working Group Finds Firms Overcharged Customers
Affected Customers in States Participating in the Settlement Will Receive Restitution for the Excessive Commissions plus Interest
WASHINGTON, D.C. – (June 9, 2025) – The North American Securities Administrators Association (NASAA) has announced a multimillion-dollar settlement resulting from an investigation conducted by state securities regulators into the practice of charging unreasonable commissions to retail customers on small dollar transactions by Edward Jones, LPL Financial, RBC, Stifel and TD Ameritrade. In the five-year period covered by the investigation, data shows that, nationwide, the firms charged approximately $19 million to process 1.12 million small dollar equity transactions and trades.
The investigation was led by a multijurisdictional working group of state securities regulators in Alabama, Iowa, Massachusetts, Missouri, Montana, Texas, and Washington. The regulators found that the five firms charged unreasonable commissions to thousands of retail brokerage customers on certain equity transactions. At this time, Alaska, Arkansas, California, Colorado, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Mississippi, New Mexico, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, West Virginia, and Wisconsin intend to join the settlement.
State securities laws prohibit firms from charging unreasonable commissions to clients. In determining excessive or unreasonable fees, regulators consider a number of factors, including guidance provided by the brokerage industry’s self-regulatory organization, FINRA. Pursuant to guidance under FINRA Rule 2121, a commission pattern of five percent or even less may be considered unfair or unreasonable. In this case, numerous equity transactions executed by the five firms included a commission well in excess of five percent of the principal value of the transaction at issue.
As a result of the investigation and settlement terms, the firms have agreed to provide affected customers with restitution, plus interest in the amount of six percent from the date of the customer’s transaction through the date of execution of the Term Sheet and Offer of Settlement. Fines and costs will also be assessed. The firms will pay total fines not to exceed $9,345,000 dollars to settling states, in addition to reimbursement of investigative costs to the states in the working group. Each firm must also take measures to ensure that its policies and procedures include safeguards to prevent charging excessive fees.
“This settlement will result in restitution to investors and shows once again that state securities regulators will take decisive action to protect investors,” said Leslie Van Buskirk, NASAA President and Wisconsin Securities Administrator.
NASAA Enforcement Section Chair Amanda Senn, Director of the Alabama Securities Commission, commended the states for their concerted efforts in investigating and resolving the matter that resulted in a return of customer funds. “This settlement is an important reminder to firms to be vigilant with regard to charging practices and to ensure they are dealing fairly with customers,” said Senn. “I also want to thank NASAA’s Broker-Dealer Section and fellow state securities regulators for uncovering these practices and helping to secure a good outcome for investors,” Senn added.
“When people decide to invest their hard-earned money, they should get the maximum value of their investing dollars. We want to thank the members of the multijurisdictional working group for their diligence and hard work,” said NASAA’s Broker-Dealer Section Chair Jim Nix and Vice Chair Amber Crouch.
– NASAA–
About NASAA:
Organized in 1919, the North American Securities Administrators Association (NASAA) is the oldest international organization devoted to investor protection. NASAA is a voluntary association whose membership consists of the securities regulators in the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, the 13 provincial and territorial securities regulators in Canada, and the securities regulator in México. For more information, visit www.nasaa.org.
For More Information:
Fred Baldassaro, Director of Communications
fbaldassaro@nasaa.org | 202-737-0900
Karen Grajales, Manager, Communications and Investor Outreach
kgrajales@nasaa.org | 202-737-0900
