FINRA Orders Firms to Pay in Excess of $8.2 Million in Restitution to Mutual Fund Investors

On December 20, 2024, FINRA issued a news release concerning an order it issued to three firms - Edward Jones, Osaic Wealth, Inc. and Cambridge Investment Research, Inc. — to pay restitution to customers of more than $8.2 million to customers harmed by the firms’ failures to provide the customers with mutual fund sales charge waivers and fee rebates.  As a result of its investigation, FINRA alleged that the firms failed to establish and maintain a supervisory system reasonably designed to determine whether customers were eligible to receive the waivers or rebates in connection with reinstatements.  Certain mutual fund issuers offer reinstatement rights, which allow mutual fund investors to reinvest in shares of a fund or fund family without incurring front-end sales charges or to recover contingent deferred sales charges.  The firms settled the claims, without admitting or denying FINRA’s charges.