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NASHVILLE – The Tennessee Department of Commerce & Insurance (TDCI), 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) following an investigation into the broker-dealer’s supervision of customers paying front-load commissions for Class A mutual fund shares, particularly when those customers later moved brokerage assets into fee-based investment advisory accounts.

The four-year investigation, led by a working group of 14 state securities regulators, focused on Edward Jones’s supervision of customers transitioning from brokerage to advisory accounts in response to the 2016 U.S. Department of Labor (DOL) Fiduciary Rule. The rule required investment advice to retirement accounts to adhere to a fiduciary standard of care.

The investigation revealed that Edward Jones charged front-load commissions for investments in Class A mutual fund shares, even in cases where customers sold or moved the mutual fund shares sooner than anticipated. Gaps in Edward Jones’s supervisory procedures were identified as a significant issue.

As part of the settlement, Edward Jones will pay an administrative fine of approximately $320,000 to each of the 50 states, Washington, D.C., the U.S. Virgin Islands, and Puerto Rico. In determining the settlement terms, states considered factors such as the positive performance of investment advisory accounts compared to 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 Tennessee comply with our securities laws,” said TDCI Assistant Commissioner for Securities Elizabeth Bowling. “TDCI’s Securities Division appreciates Edward Jones’s cooperation throughout this investigation and settlement process. Firms offering both brokerage and investment advisory services must ensure their customers receive the services they want at an appropriate price.”

Investors with questions can contact TDCI’s Securities Division online at tn.gov/securities or call 800-863-9117 for more information.