SEC Charges Transamerica for Overcharging Clients

Posted on April 17th, 2014 at 10:45 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Transamerica Financial Advisors, the St. Petersburg, Fla.-based financial services firm, were charged for improperly calculating advisory fees and overcharged clients, according to SEC charges.

As is typical, Transamerica Financial Advisors provided clients with breakpoint discounts in order to reduce the fees when clients increased their assets in certain investment programs.  The firm permitted clients to total the values of related accounts to obtain those discounts.  However, Transamerica failed to process every aggregation request by clients and also had conflicting policies on whether representatives were required to pass on to clients the savings from breakpoint discounts.  As a result, the firm overcharged certain clients by failing to apply the discounts, and failed to have adequate policies and procedures to ensure that the firm was properly calculating its fees.

As a result of the SEC investigation, the firm has reviewed client records and has reimbursed 2,304 current and former client accounts with refunds and credits totaling $553,624 including interest.  In the settlement, Transamerica has agreed to pay an additional $553,624 penalty.

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 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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