RBC Capital Markets’ Supervisory Failures result in almost $700,000 in Overcharges

According to a Letter of Acceptance Waiver and Consent (AWC) signed December 15, The Financial Industry Regulatory Authority (FINRA) has sanctioned RBC Capital Markets (CRD# 31194) for supervisory failures connected to recommendations of 529 Savings Plans. 

From January 1, 2008, to July 21, 2016, RBC allegedly failed to establish and maintain a supervisory system reasonably designed to supervise representatives’ recommendations to customers to purchase particular share classes of 529 savings plans, according to the AWC. 

The firm reportedly did not provide adequate guidance to representatives regarding the importance of considering share-class differences when recommending 529 plans, according to FINRA. Further,  RBC did not provide supervisors with adequate guidance or the information necessary to properly evaluate the suitability of 529 share class recommendations. 

The regulator did not fine RBC, instead, crediting the firm for  its “extraordinary cooperation.” RBC apparently initiated a review of its supervisory systems and procedures applicable to 529 plan recommendations, and corrected supervisory deficiencies it identified during that review, as well as establishing a plan to provide remediation to affected customers. 

The firm reportedly consented to the sanctions of a censure and restitution of $685,520 plus interest to affected customers. 

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