Wells Fargo and Merrill Lynch Agree to $4.4 Million Settlement Over Excessive Trading Commissions
From the desk of Jim Eccleston at Eccleston Law
Wells Fargo and Merrill Lynch will pay a combined $4.4 million to resolve allegations that they overcharged customers on small-dollar securities transactions. According to AdvisorHub, a coalition of eight state securities regulators identified more than 256,000 transactions in which the firms charged excessive minimum commissions between 2020 and 2025.
The North American Securities Administrators Association (NASAA), which represents the regulators, found that both firms applied minimum ticket charges to small trades, causing commissions to consume an excessive share of each transaction's value. State regulators historically have scrutinized commissions that exceed 5% of a transaction's principal value.
AdvisorHub reports that Wells Fargo accounted for most of the identified overcharges. According to NASAA, Wells Fargo Advisors and its independent brokerage, Financial Network, collected approximately $3.9 million in excess commissions across 228,243 transactions. Merrill Lynch generated nearly $549,000 in overcharges during the same period.
The settlement includes a $2.4 million fine, restitution to affected customers, administrative fines, and investigation costs, according to NASAA. More than 2,000 Massachusetts investors will receive refunds.
Massachusetts Secretary of the Commonwealth William F. Galvin, whose office coordinated the investigation, emphasized the importance of protecting retail investors from excessive brokerage fees.
AdvisorHub further reports that the settlement requires both firms to certify that they have revised their commission policies and strengthened supervisory procedures to ensure that charges remain fair and reasonable.
The settlement follows other regulatory actions involving excessive brokerage commissions. In June 2025, several large broker-dealers, including Edward D. Jones & Co. and LPL Financial, agreed to a nearly $9.3 million settlement over similar allegations. Raymond James Financial also agreed to pay $13 million in 2023 to resolve comparable allegations involving its employee and independent contractor divisions.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, securities law, excessive trading commissions, wells fargo settlement, merrill lynch settlement, broker-dealer compliance
