FINRA Reveals Baird's $500K Shortfall in Mutual Fund Rebates to Clients
From the desk of Jim Eccleston at Eccleston Law
Robert W. Baird & Co. has reached a settlement with the Financial Industry Regulatory Authority (FINRA) wherein they accepted a censure and committed to reimbursing more than $500,000 to clients who were overcharged for their mutual fund investments.
The settlement comes in response to a failure in Baird's supervisory system spanning January 2015 to March 2021. During this period, approximately 2,300 eligible accounts did not receive mutual fund sales-charge waivers and fee rebates as owed. The issue primarily centered around mutual fund investors qualifying for fee waivers due to their reinvestment in another fund within the same family, falling under a "right of reinstatement" provision, according to FINRA. In total, customers were overcharged by $519,000, as reported by AdvisorHub.
Baird was found to have breached FINRA's Rule 3110, which mandates the maintenance of an effective compliance supervision system, and the comprehensive Rule 2010, requiring brokerage firms to adhere to "high standards of commercial honor." The company signed the agreement without admitting or denying the findings.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra