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December 11, 2009

Edward Jones and Merrill Lynch Brokers Like Where They Work, While UBS Representatives are the Least Happy

According to Registered Rep magazine’s latest Broker Report Card, 98% of Edward Jones brokers say their securities firm is the best place to work. 78% of Merrill Lynch brokers ranked their investment firm as the number the one workplace.

Findings were compiled from Internet surveys taken by 898 captive brokers last October. Other results:

• 73% of Morgan Stanley Smith Barney representatives gave their firm the top spot.
• 53% of Wells Fargo Advisors (includes Wachovia Securities and AG Edwards) brokers said their place of work was #1.
• UBS received the least accolades from its workers, with just 1/3rd of its brokers ranking it as the best securities firm workplace.

However, UBS brokers were at the top of the heap for self-reported metrics. According to UBS advisers, they claim an average $101.2 million for assets under management and gross production of $696,032. Other firms:

• Merrill Lynch representatives: $655,250 average gross production; $97.1 million under management
• Morgan Stanley Smith Barney brokers: $84.9 million under management ; $619,961 in production
• Wells Fargo representatives: $80.2 million in client assets; $542,350 in production
• Edward Jones representatives: $364,258 in average production; $58.6 million in assets under management

Yet, as Shepherd Smith Edwards & Kantas, LLP founder and stockbroker fraud lawyer William Shepherd points out, “securities brokers at large firms with average production receive about 30% of their gross production in pay. Brokers at Edward Jones receive about half. Thus, the take home pay for the brokers is not as different as is indicated. In any event, it is notable that the average stockbroker earns about $200,000 per year, a college degree is not required to gain a license, and the training takes only 4 months.”

Related Web Resources:
UBS Reps Least Happy Among Big-Firm Brokers, Wall Street Journal

Registered Rep

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Posted In: Edward D. Jones , Financial Firms , Merrill Lynch , Miscellaneous , Morgan Stanley , UBS , Wells Fargo

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July 19, 2007

Edward Jones Must Pay $75 Million For Failing to Disclose Mutual Fund Incentives

Edward D. Jones & Co. will pay $75 million to settle charges by the Securities and Exchange Commission that it failed to adequately disclose financial incentives to sell mutual funds from its Preferred Families of mutual funds.

The SEC also said that Edward Jones did not make adequate disclosures on its website about its revenue sharing, its directed brokerage payments and other payments for distribution of mutual fund shares. The firm was also accused of failing to disclose information about college savings (or “529") plans it sold.

Edward Jones agreed to pay $37.5 million in civil penalties, as well as $37.5 million in disgorgement, and to alter its website disclosures about the preferred mutual fund family program and the college savings plan, but neither admitted or denied the claims against it.

Shepherd Smith and Edwards represents institutional and individual investors nationwide in claims against members of the securities industry. We have served thousands of victims of misconduct by investment firms and their representatives, including those at Edward Jones & Company. To learn whether our firm can assist you, contact us to arrange a free consultation with one of our attorneys.

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Posted In: Edward D. Jones , Mutual Funds , SEC Enforcement

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May 3, 2007

URGENT UPDATE: Edward Jones Seeks to Settle All Claims "Known and Unknown" for $18.00 per Current and Former Client Unless They Take Action Before June 11

As earlier reported, the securities firm of Edward Jones was ordered by the SEC to pay a total of $79 million to its clients and former clients. According to the SEC, the company failed to disclose kickbacks the firm received from various mutual fund companies, known as the “Preferred Fund Families.” The Preferred Families mutual funds are: American Funds; Federated Investors; Goldman Sachs Group; Hartford Mutual Funds; Lord Abbott Funds; Putnam Investments; and Van Kampen Investments.

Now, Edward Jones may be attempting to settle all potential civil claims against it “KNOWN OR UNKNOWN”, by its current or former clients FOR $18.00 PER CLIENT! The proposed settlement is as a result of a class action suit brought against the firm on behalf of millions of its current and former clients in the firm’s hometown of St. Louis, Missouri.

Language in the proposed settlement indicates the Edward Jones firm may be seeking to exempt itself from ANY AND ALL CLAIMS which could have been asserted by over 5 million of its current and former clients. Although, none of these clients would have actually signed such an agreement themself, any pending or future lawsuit, arbitration action or other legal claim could potentially be prejudiced by the final language in the settlement agreement.

According to the Notice of Proposed Settlement forwarded to these clients and former clients, based on the information provided the Plaintiffs by Edward Jones, the estimate of recovery per Class Member is approximately 17.99 in cash per former client and $19.86 in "credit vouchers" per current client. However, the actual amount any class action member might receive would vary based a based on a large number of factors.

According to the Notice of Proposed Settlement, CLIENTS AND FORMER CLIENTS OF EDWARD JONES MUST TAKE IMMEDIATE ACTION BEFORE JUNE 11, 2007, to avoid being included in this settlement. In class actions, THOSE WHO TAKE NO ACTION prior to the "opt out" date almost always ARE PREVENTED FROM SEEKING ANY OTHER RECOVERY for claims which are ultimately exemped as part of the class action settlement agreement.

[NO INVESTOR SHOULD ACT TO OPT OUT OF A CLASS ACTION OR DECIDE TO REMAIN A PART OF THE ACTION WITHOUT LEGAL ADVICE REGARDING THEIR OWN SITUATION. THE INFORMATION PROVIDED HEREIN IS NOT INTENDED AS SUCH LEGAL ADVICE.]

Numerous times ours law firm has been unable to assist investors with viable claims - some for hundreds of thousands or even millions of dollars - because these investors failed to take prompt action to be removed from class action cases prior to the deadline. These investors usually later receive either a TOKEN SUM from the class action settlement OR NOTHING AT ALL if they later fail to submit the required claim forms.

Shepherd, Smith and Edwards is a law firm that has represented thousands of investors nationwide to recover losses caused by misconduct of investment firms and their brokers. We offer free consultations and can be reached toll-free at (800) 259-9010 or via email at firm@sselaw.com

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Posted In: Class Action Lawsuits , Edward D. Jones

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May 2, 2007

Edward Jones Issues Settlement Checks To Customers as Ordered by SEC for Kickback Scheme

Edward Jones is now sending checks and making electronic payments to its current and former customers as part of its settlement of revenue sharing claims. The Securities and Exchange Commission announced the distribution of $79 million from the “Fair Fund” (also known as the “Edward Jones & Co., L.P. Qualified Settlement Fund”) as compensation to victims of Edward Jones’ practices according to the settlement reached. These payments do not compensate Jones' clients for any losses caused by any other unfair sales practices.

According to the SEC, Edward Jones failed to adequately disclose kickbacks the firm received from various mutual fund companies, known as the “Preferred Fund Families.” The Preferred Families mutual funds are: American Funds; Federated Investors; Goldman Sachs Group; Hartford Mutual Funds; Lord Abbott Funds; Putnam Investments; and Van Kampen Investments. The SEC’s order is available on the SEC website: http://www.sec.gov/litigation/admin/33-8520.htm

Edward Jones’ kickback scheme impacted approximately 2.1 million of its customers who purchased shares of the Preferred Fund Families between January 1, 1999 and
December 31, 2004. The firm told the public and its customers it was promoting the sale of the Preferred Families' mutual funds because of the funds' long-term investment objectives and performance. However, Edward Jones failed to disclose that it received tens of millions of dollars of undisclosed revenue sharing payments from the Preferred Families each year for selling their mutual funds.

Customers receiving settlement checks and direct deposits are also receiving a letter asvising the recipient to consult a tax advisor before cashing or depositing the check. Some customers may receive a Form 1099 as a result of negotiating the check since the payment may be construed as a taxable distribution. Those receiving checks only have a limited time to cash or deposit the check before it becomes void.

The payments being made by Edward Jones to its clients and former clients are not reimbursing them for losses which may have been by caused by other wrongdoing such as unsuitable investments, misrepresentations or other improper sales practices. Investors who have lost a significant portion of their account at any brokerage firm should seek legal advice to learn if they may be able to recover all or part of such losses.

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Posted In: Edward D. Jones , Investor Fraud , SEC Enforcement

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February 23, 2007

Few Brokerages Disclose “Shelf Space” Agreement Details

The SEC is considering whether to change a rule that could require brokers to reveal whether they have “shelf-space” programs, which treats certain fund companies preferentially in exchange for payment by the fund. Its first point-of-sale disclosure rule had pushed for brokerage firms to reveal the actual amount that they received from fund companies that take part in shelf-space programs. Most brokerage firms, however, are still not abiding by this standard, usually only disclosing the amount that they receive from an agreement without naming the fund company involved.

Even though many brokerage firms are informing investors about any “shelf space” agreements they have with specific mutual funds, most of them are still not disclosing the terms of these agreements. Although brokers are not directly paid by the agreement, a shelf space deal can indirectly influence the sale. For example, according to Merrill Lynch & Co. Inc., funds that do “not enter into [shelf space] arrangements ... are generally not offered to clients.”

Shelf space agreements can vary, although most of the bigger firms receive anywhere from 0.05% to 0.25% of sales or assets. Brokerage firms claim this money supports education, sales, and technology.

An example of the kinds of agreements that exist is the deal between Edward Jones and some of its mutual fund companies. Edward Jones, which paid regulators $75 million for allegedly not making adequate disclosures, is one of the firms that now discloses what it collects each time:

· American Funds pays 0.03% of assets
· Federal Investors Inc. of Pittsburgh pays 0.25% on existing assets and new sales

Legal liability has compelled dealers to reveal some of the conflicts involving shelf space fees, information, and transactions, which used to take place under the table.

The SEC reached a settlement with Smith Barney regarding shelf space payments in 2005, after accusing the firm of not providing enough information regarding the “magnitude of revenue sharing payments” with their disclosures.

Mutual funds that the SEC has gone after include MFS Investments, Putnam Investments, Pimco Funds, and Franklin Templeton Distributors Inc.

Although securities regulators have created law and regulations to protect investors, incidents will occur when these laws are disregarded and investors will experience losses as a result. In order to recover what they’ve lost, an investor must file a claim. Having an experienced attorney represent you in this matter will increase the chances of recovery.

Shepherd Smith and Edwards can help you file your recovery claim. Our attorneys have the experience to represent you against brokerage firms, whether negotiating a settlement during securities arbitration or in court. Contact Shepherd, Smith, and Edwards, and your first consultation is free.

Brokerages slow to reveal sales pact details, Investment News, February 19, 2007

Related Web Resources:

Attorney General Lockyer Files Major Securities Fraud Lawsuit Against Edward Jones:
Documents Detail How Secret Mutual Fund Payments Conflicted With Investors' Interests, Office of the Attorney General, State of California, December 20, 2004

U.S. Securities and Exchange Commission

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Posted In: Edward D. Jones , Merrill Lynch , SEC Enforcement

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