Fidelity Fined $350,000 for Overcharging Customers

Posted on February 7th, 2015 at 3:34 PM
Fidelity Fined $350,000 for Overcharging Customers

From the Desk of Jim Eccleston at Eccleston Law Offices:

Fidelity Investments Group, the third-largest custodian as ranked by the number of registered investment adviser clients, recently has been fined $350,000 by FINRA for overcharging more than 20,000 clients a total of $2.4 million.

Between January 2006 and September 2013, Fidelity inappropriately charged for certain transactions in fee-based accounts in its Institutional Wealth Services group, which provides trading and brokerage services to investment advisers and their clients.

According to FINRA, the overcharges resulted from a gap in supervision over how Fidelity applied fees under its asset-based pricing model. As a result, certain clients might have been double-billed or charged excess commissions in addition to the asset-based management fee.

Fidelity discovered the problems in the spring of 2012, self-reported the issue to FINRA and voluntarily reimbursed all clients. The issues affected roughly 1.5% of the brokerage accounts held for investment advisers and the majority required reimbursement of less than $100.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: FINRA, Fidelity Investments Group, Investment Adviser

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