ProEquities Inc. Sanctioned for Mutual Fund Overcharges
According to the Financial Industry Regulatory Authority (FINRA), the regulator has sanctioned broker-dealer ProEquities Inc. for alleged mutual fund overcharges.
According to a Letter of Acceptance, Waiver & Consent on March 7, between January 1, 2011, and March 2016, ProEquities allegedly disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares it certain mutual funds without a frontend sales charge. These eligible customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.
ProEquities reportedly failed to establish and maintain a supervisory system and procedures during this time period reasonably designed to ensure that eligible customers who purchased mutual fund shares received the benefit of applicable sales charge waivers.
As a result, ProEquities violated NASD Conduct Rule 3010 (for misconduct before December 1, 2014), FINRA Rule 3110 (for misconduct on or after December 1, 2014), and MIRA Rule 2010.
According to the AWC, ProEquities, in addition to a censure, will provide remediation to eligible customers who, from January 1, 2011, qualified for, but did not receive, the applicable mutual fund sales charge waivers.
Additionally, ProEquities is “promptly taking action and remedial steps to correct the violative conduct, including programming changes to preclude ongoing customer harm while the Firm instituted permanent systems upgrades.”
This information is publicly available on FINRA’s website and is provided to you by The White Law Group.
FINRA is a private corporation that acts as a self-regulatory organization and the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. It is a non-governmental organization that regulates member brokerage firms and exchange markets.
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Tags: FINRA arbitration, FINRA attorney, FINRA lawyer, FINRA Regulation, investor protection, ProEquities Inc. Sanctioned, Proequities Investigation, ProEquities mutual fund overcharges, securities fraud attorney Last modified: March 11, 2019