Lincoln Investment Planning to Pay Clients For Not Giving Discounts on Mutual Fund Shares
FINRA is ordering broker-dealer Lincoln Investment Planning to pay $1.37M to clients to whom it did not give the discounts they were entitled to when they purchased mutual fund A shares between 1/2011 and 6/2018.
The self-regulatory organization contends that the firm placed certain charitable organizations and retirement plan customers at a disadvantage by charging them a front-end sales charge even when they qualified to not pay the fees.
Instead, contends FINRA, these customers were either sold class A shares and paid the front-end charge or class C or B shares that came with back-end sales fees and costly “ongoing fees and expenses.” The SRO found that Lincoln Investment Planning lacked the supervisory procedures and system needed to make sure that the mutual fund sales charges waivers were applied when clients were eligible.
Lincoln Investment Planning, which settled with FINRA, self-reported this issue. However, it is not denying or admitting to the findings.
Investment Advisory Firm Faces Charges After Continuing to work with Barred Broker
The US Securities and Exchange Commission has filed charges against investment advisory firm Grenda Group for continuing to work with Walter Grenda, even though is barred from the industry. According to the regulator’s complaint, Grenda, whom the SEC barred in 2015 from associating with another investment adviser, continued to be associated with the firm.
Alleged ongoing activities including meeting with clients and prospective clients and “making discretionary changes” in investment accounts. Walter also allegedly pretended to be one Grenda Group client when on the phone with the firm’s brokerage firm and he also allegedly posed as his son Gregory Grenda when speaking to the same broker-dealer.
Meantime, Gregory is accused of continuing to allow his father to associate with the firm and not disclosing to clients that Walter had been barred. When clients did ask about the bar, he allegedly made misleading statements.
Investment Advisory Firm Allegedly Promoted Portfolio Strategies Using Misleading and False Ads
Massachusetts Financial Services Company will pay a $9M penalty to settle allegations that it used ads that were misleading and false to market portfolio strategies to prospective clients and investors, including institutional clients, advisory clients, brokerage firms, insurance companies, consultants, and investment advisers. The Boston-based investment advisory firm settled the SEC’s charges without denying or admitting to them.
According to the regulator, from 2006 to 2015 Massachusetts Financial Services, touted a “blended” research approach utilizing “fundamental and quantitative stock ratings.” It marketed the results using “a hypothetical portfolio of stocks rated ‘buys,'” claiming that the use of the two approaches led to better performances than if only one or the other was employed.
The SEC, however, contends that some of the ads were not accurate because they didn’t disclose that some of the quantitative ratings used in the hypothetical portfolio were based on an application that was back-tested and retroactive.
Now, Massachusetts Financial Services must pay a $1.9M penalty.
At Shepherd Smith Edwards and Kantas, LLP, our brokerage firm fraud law firm works with investors in helping them to recover losses they sustained because broker-dealers, investment advisory firms, or their representatives were negligent, engaged on wrongdoing, or committed fraud. Contact our investor lawyers today for a free case consultation.
In latest A-share discount snafu, broker-dealer pays $1.37 million to clients, InvestmentNews, September 5, 2018
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