The White Law Group reviews the customer complaints and regulatory history of Edward Jones.
Edward Jones Background
Edward Jones (CRD#: 250/SEC#: 801-3297,8-759), based in St. Louis, MO, is a dual registered broker dealer and investment advisory firm. The firm has been registered since 1941.
According to its CRD/Broker report, Edward Jones, also known as Edward D. Jones & Co., LP registered in 1941, has 228 disclosures on its record, including 76 regulatory actions and 150 arbitrations, among others.
A broker-dealer’s Central Registration Depository (CRD) record is a database maintained by the Financial Industry Regulatory Authority (FINRA) and is used to store and track information about individuals and firms involved in the securities industry.
Regulatory actions found on a broker-dealer’s CRD may include censures, fines, suspensions, and restitution, among others. They can have grave consequences for the firm’s profile and reputation.
The following is a review of regulatory actions involving Edward Jones. The review includes regulatory sanctions from the Financial Industry Regulatory Authority (FINRA), the US Securities Exchange Commission (SEC) and state regulators.
Understated Damages in Edward Jones Customer Complaints
June 20, 2019 – Edward Jones understated the alleged damages in customer complaints disclosed to the Financial Industry Regulatory Authority (FINRA) over a two-year period.
The firm reportedly filed 158 Forms U4 from April 2016 to March 2018, affirmatively answering whether a customer complaint involved compensatory damages of $5,000 or more. In 79 of these cases, where Edward Jones reported alleged damages of $5,000, the actual damages specified in the customer complaints exceeded this amount.
The inaccuracies resulted from associates’ misunderstanding of disclosure requirements. Upon identification by FINRA, Edward Jones promptly updated the forms, provided additional training, and implemented safeguards.
The misleading filings violated FINRA Rule 1122, Article V, Section 2 of FINRA’s by-laws, and consequently, FINRA Rule 2010. As a result, Edward Jones consented to censure, a $40,000 fine, and written certification.
Edward Jones Supervisory Failures – $725,000 Fine and Censure
July 13, 2017 – From April 2010 to 2014, Edward Jones reportedly failed to establish an adequate supervisory system, including written procedures regarding the creation and distribution of consolidated reports, violating NASD Rule 3010(a) and FINRA Rule 2010, according to a letter of acceptance.
The firm provided registered representatives with centralized tools to create reports containing comprehensive financial information for clients. Despite using approved templates, the firm lacked procedures to minimize the risk of inaccurate information.
It also had no system to track whether reports were provided to customers, only whether they were printed. During this period, approximately 52 million reports were generated by registered representatives.
Edward Jones Customers Overpaid $4.6 million for Bonds
August 13, 2015 – Edward Jones and its former head of municipal underwriting reportedly settled charges with the SEC for overcharging customers in new municipal bond sales.
The firm improperly offered new bonds from its inventory to customers at higher prices than the initial offering prices negotiated with bond issuers. In some cases, Edward Jones refrained from offering the bonds until after trading commenced in the secondary market, then offered them at prices higher than the initial offering prices.
Customers paid at least $4.6 million more than they should have for new bonds. Edward Jones agreed to pay over $20 million in settlement, including nearly $5.2 million in disgorgement and prejudgment interest to affected customers.
The executive reportedly agreed to pay $15,000 and to be barred from the securities industry for at least two years.
The case also involved supervisory failures related to dealer markups on secondary market trades, and Edward Jones undertook remedial efforts to disclose markups on all fixed income retail order trade confirmations.
Edward Jones and 4 Other Firms Fined for Mutual Fund Overcharges
October 30, 2015 – Five financial firms including Edward Jones were reportedly ordered by the Financial Industry Regulatory Authority (FINRA) to reimburse clients over $18 million for mutual fund overcharges.
The firms, including Edward Jones, Stifel Nicolaus, Janney Montgomery, AXA Advisors, and Stephens, failed to waive mutual fund sales charges for eligible charitable organizations and retirement accounts.
Without admitting or denying the allegations, the firms agreed to restitution amounts as follows: Edward D. Jones & Co., L.P. – $13.5 million, Stifel Nicolaus & Company, Inc. – $2.9 million, Janney Montgomery Scott, LLC – $1.2 million, AXA Advisors, LLC – $600,000, and Stephens Inc. – $150,000.
FINRA found that these firms did not waive charges for eligible accounts, affecting over 25,000 accounts. Additionally, the firms were cited for inadequate supervision of waivers offered by certain mutual funds, relying unreasonably on financial advisors to waive charges without proper information and training.
New Hampshire Regulators Sanction Edward Jones for Cold Calling
February 27, 2014– Edward Jones agreed to pay $750,000 to settle allegations by the New Hampshire Bureau of Securities Regulation that it unlawfully solicited residents on the National Do Not Call Registry.
The bureau accused the firm of failing to appropriately honor do-not-call requests and failing to train and supervise brokers adequately in telephone solicitation.
Despite the settlement, Edward Jones did not admit guilt and agreed to cease violations, modify its policies and procedures, and pay the monetary settlement.
Edward Jones Customer Complaints and Broker Misconduct
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.
There have been several cases of registered representatives employed by Edward Jones who were allegedly involved in broker misconduct and fraudulent activities.
FINRA Investigation: Alexandria Bovee and Alleged Ponzi Scheme
December 13, 2023 – Broker Alexandria Bovee, formerly registered with Edward Jones in Sumter, SC, has reportedly been barred from the securities industry by FINRA following allegations of violating federal securities laws in connection with the offer or sale of securities issued by Integrated National Resources, Inc. (INR).
The matter originated from an Investor Complaint Form submitted to FINRA, referencing an SEC complaint against INR, where Bovee was named as a “relief defendant.”
The SEC complaint involves an alleged offering fraud and Ponzi-like scheme by INR, raising over $60 million from investors for cannabis operations. Bovee reportedly failed to provide requested documents in a FINRA investigation, leading to her industry ban as of December 13, 2023.
Edward Jones Broker Charged with Defrauding 3 Customers
November 24, 2021 – Ronald T. Molo, a former financial advisor at Edward Jones, has been charged by the Securities and Exchange Commission (SEC) for allegedly stealing $800,000 from three customers between January 2019 and November 2020.
Molo purportedly convinced the investors to transfer money for investment in tax-free bonds but instead used the funds for personal expenses, including mortgage payments and automobile purchases.
To conceal the fraud, Molo allegedly sent investors fake interest payments from nonexistent bonds using altered cashier’s checks. The SEC seeks injunctive relief, disgorgement, prejudgment interest, and civil penalties.
Criminal charges were also filed by the U.S. Attorney’s Office for the Northern District of Illinois in a parallel action.
Molo was affiliated with Edward Jones until his termination on June 23, 2021, and has customer complaints on his record, including allegations of misappropriation of funds and unauthorized trades.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
National Securities Attorneys
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
The Financial Industry Regulatory Authority (FINRA) operates the largest dispute resolution forum in the securities industry. In fact, FINRA Dispute Resolution is the forum for all disputes between investors, brokerage firms and individual brokers. This is because most brokerage firms have mandatory arbitration clauses in their account agreements that require investors to file their disputes through FINRA.
The White Law Group represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors who were defrauded by their financial advisors. For more information, please visit our website, www.whitesecuritieslaw.com.
If you have suffered losses investing with Edward Jones and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
Tags: broker-dealer review, Edward Jones, FINRA, SEC sanctions Last modified: February 2, 2024