UBS, Wells, Other Firms Ordered To Pay $9.5 Million After 529 Savings Plan Sweep

Posted on December 28th, 2021 at 1:10 PM
UBS, Wells, Other Firms Ordered To Pay $9.5 Million After 529 Savings Plan Sweep

From the Desk of Jim Eccleston at Eccleston Law:

The Financial Industry Regulatory Authority (FINRA) agreed to a settlement with at least five investment advisory firms including UBS Wealth Management, Wells Fargo, LPL Financial and MML Investor Services for nearly $9.5 million regarding college savings plan sales violations. 

According to FINRA, each of the five firms failed to “establish and maintain a supervisory system reasonably designed to supervise” representatives’ 529 plan share class recommendations. Each of the firms settled without admitting or denying FINRA’s investigatory findings. FINRA levied the largest penalty against UBS, which agreed to pay $4.8 million in restitution plus interest to clients who incurred excess fees between January 2013 and June 2018. 

Additionally, Wells Fargo agreed to pay nearly $3.9 million in restitution plus interest to at least 4,912 accounts that had accrued excess fees. According to FINRA, Wells’ written policies did not “reasonably address” share-class suitability factors while emphasizing only “fees and expenses, investment objective and risk tolerance.” Wells Fargo’s conduct extended between January 2011 and December 2016 while the firm’s transaction review system regularly failed to flag “inconsistent” purchases, according to FINRA. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, ubs, wells fargo, finra, lpl financial

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