NEWS RELEASE
For Immediate Release
Media Contact:
Annelise Grygiel
annelise.grygiel@state.co.us
Denver, Colorado — January 21, 2025 — Colorado Securities Commissioner Tung Chan, a member of the North American Securities Administrators Association (NASAA), has joined a $17 million settlement with Edward D. Jones & Co., L.P. (Edward Jones) resulting from an investigation into the broker-dealer’s supervision of customers paying front-load commissions for Class A mutual fund shares in light of later moving brokerage assets into fee-based investment advisory accounts.
The four-year investigation was led by a working group of 14 state securities regulators and looked into Edward Jones’s supervision of customers moving from brokerage to advisory accounts in light of the 2016 U.S. Department of Labor (DOL) Fiduciary Rule that would make investment advice to retirement accounts subject to a fiduciary standard of care.
The investigation found that Edward Jones charged front-load commissions for investments in Class A mutual fund shares in situations where the customer sold or moved the mutual fund shares sooner than originally anticipated. The states found gaps in Edward Jones’s supervisory procedures in this respect.
As part of the settlement, Edward Jones will pay each of the 50 states, Washington, D.C., the U.S. Virgin Islands, and Puerto Rico an administrative fine of approximately $320,000. In evaluating the supervisory failures and determining the appropriate resolution, the states considered certain facts such as the positive performance of the investment advisory accounts as compared to the brokerage accounts.
“In partnership with NASAA and other state securities regulators, we will continue to protect Main Street investors and ensure that companies operating in Colorado follow our securities laws,” said Commissioner Chan. “The Colorado Division of Securities appreciates the ongoing cooperation of Edward Jones throughout this investigation and settlement process. Firms that offer both brokerage and investment advisory services should be mindful that customers are receiving the services the customer wants at an appropriate price.”
About DORA and the Division of Securities
DORA is the state's umbrella regulatory agency, charged with managing licensing and registration for multiple professions and businesses, implementing balanced regulation for Colorado industries and protecting consumers. Our nearly 600 employees are dedicated to preserving the integrity of the marketplace and promoting a fair and competitive business environment throughout Colorado.
The Division of Securities exists to protect investors and maintain confidence in the securities market, while avoiding unreasonable burdens on the marketplace by licensing securities professionals, enforcing securities law violations and helping Coloradans become more informed investors. Visit securities.colorado.gov to learn more.