By Jessica H. Antoniades, Esq. of Shustak Reynolds & Partners, P.C. posted on Wednesday, January 21, 2015.

Jessica H. Antoniades, Esq.

Associate

The Financial Industry Regulatory Authority ("FINRA") recently ordered Fidelity Investments to pay a $350,000 fine after determining the firm overcharged customers $2.4 million over a period of approximately 7 years.  The overcharges affected over 20,000 customers, some of whom were double-billed or charged excess commissions on fee-based accounts.  After discovering the problems in 2012, Fidelity self-reported the issue to FINRA, and it has reimbursed all affected clients.

FINRA concluded the problems were caused by Fidelity's failure to supervise fee-based brokerage accounts.  Notably, while these overcharges occurred, Fidelity had no supervisory principal in charge of overseeing the firm's fee-based accounts.  Fidelity consented to FINRA's order, which includes a censure and $350,000 fine.

This is just one example of many where a brokerage firm has been fined for failing to supervise customer accounts.  Shustak Reynolds & Partners, P.C.'s New York, San Francisco, Irvine and San Diego securities, FINRA and SEC attorneys handle a wide range of securities and FINRA related issues and have substantial expertise and experience in the securities and brokerage business.  Contact us today for a confidential analysis of your situation.

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