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22 June 2024

Merrill, Prudential, UBS fined over mutual funds

By Agencies

Five brokerages have agreed to settle regulatory charges related to improper mutual fund sales, resulting in $2.4 million (Dh8.8m) of fines and the reimbursement of more than $20m (Dh73.4m) to customers, the Financial Industry Regulatory Authority said.

The regulator (FINRA) fined Prudential Securities $1.05 million and UBS AG's UBS Financial Services $1 million for improper sales of Class B and Class C mutual fund shares, as well as failing to have proper supervisory systems to allow investors to obtain waivers of sales charges.

Merrill Lynch & Co was fined $250,000 for similar supervisory failures. Pruco Securities was fined $100,000 for improper sales of Class B shares.

FINRA also found that Wells Fargo & Co's securities division lacked reasonable supervisory systems, but it did not impose a fine because Wells Fargo discovered the problems on its own and took steps to fix them.

The regulator said all five brokerages will reimburse customers who qualified for but did not receive appropriate fee reductions. None admitted wrongdoing. FINRA regulates more than 5,000 brokerages. (Reuters)