{"id":4671,"date":"2008-10-22T21:37:54","date_gmt":"2008-10-22T21:37:54","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2008\/10\/banorte_securities_internation"},"modified":"2022-03-30T09:39:15","modified_gmt":"2022-03-30T14:39:15","slug":"banorte-securities-internation","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/banorte-securities-internation\/","title":{"rendered":"Banorte Securities International Agrees to $1.1 Million Fine Over Charges It Recommended Class B Mutual Fund Shares Instead of Class A"},"content":{"rendered":"<p>Banorte Securities International, Ltd. has agreed to a $1.1 million fine to settle charges that it recommended to customers that they buy Class B off-shore mutual fund shares even though they would have benefited more financially by buying Class A shares. The Financial Industry Regulatory Authority announced the settlement agreement last week.<\/p>\n<p>By agreeing to settle, Banorte is not admitting to or denying the charges. The company also agreed to a plan that would address more than 1,400 transactions involving accounts in over 300 customer households.<\/p>\n<p>Banorte had been accused of having <a href=\"https:\/\/www.investorlawyers.com\/investor-claims\/broker-misconduct\/\">inadequate supervisor systems<\/a> to oversee the sales of off-shore mutual fund shares, including guidelines that failed to properly advise registered representatives that Class A share purchases eligible for front-end loans were more affordable than Class B Shares.<\/p>\n<p>According to FINRA enforcement head Susan L. Merrill, firms are obligated to consider all share classes and pricing features that would most benefit a customer-regardless of whether or not that clients reside in the United States or abroad. The majority of Banorte&#8217;s customers reside in Mexico. Merrill also said that firms must take all relevant factors into considerations when making mutual fund recommendations to clients.<\/p>\n<p><strong><em>Class A Shares<\/em><\/strong><\/p>\n<p>These mutual fund shares come with a front-end sales charge and lower ongoing fees that are asset-based.<\/p>\n<p><strong><em>Class B Shares<\/em><\/strong><\/p>\n<p>While these mutual fund shares usually do not come with a front-end sales fee, their asset-based fees are usually higher than Class A Shares&#8217; fees.<\/p>\n<p>FINRA alleges that from 2003 until May 2004, the majority of Banorte mutual fund sales involved Class B shares even though investing in Class A Shares could have resulted in higher returns for clients.<\/p>\n<p><strong>Related Web Resources:<\/strong><\/p>\n<p><a href=\"https:\/\/www.finra.org\/media-center\/news-releases\/2008\/finra-fines-banorte-securities-international-11-million-improper-sales\" target=\"_blank\" rel=\"noopener noreferrer\">FINRA Fines Banorte Securities International $1.1 Million for Improper Sales of Class B Mutual Fund Shares<\/a>, FINRA, October 16, 2008 <a href=\"https:\/\/www.investorlawyers.com\/blog\/banorte-securities-internation\/#more-4671\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Banorte Securities International, Ltd. has agreed to a $1.1 million fine to settle charges that it recommended to customers that they buy Class B off-shore mutual fund shares even though they would have benefited more financially by buying Class A shares. The Financial Industry Regulatory Authority announced the settlement agreement last week. By agreeing to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3879,3739,3799],"tags":[],"class_list":["post-4671","post","type-post","status-publish","format-standard","hentry","category-banorte-securities-international","category-finra","category-mutual-funds"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Banorte Securities International Agrees To $1.1M Fine Over Class B Mutual Fund Shares Charges &#8212; Investor Lawyers Blog<\/title>\n<meta name=\"description\" content=\"Banorte Securities International has agreed to a $1.1 million fine to settle charges over recommending Class B off-shore mutual fund shares to customers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/banorte-securities-internation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Banorte Securities International Agrees To $1.1M Fine Over Class B Mutual Fund Shares Charges &#8212; 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