Brokerage Firm Review: Edward Jones

Edward Jones (“Edward Jones”) (CRD# 250) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Edward Jones, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Edward Jones, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Edward Jones?

If you’ve lost money caused by Edward Jones and/or its employees’ misconduct then the answer is, YES, you can sue Edward Jones, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 45 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Edward Jones in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Edward Jones is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Edward Jones?

Edward Jones (CRD#250) is a registered broker-dealer. It operates as a full-service broker-dealer, providing a range of financial products and services to individual investors and financial advisors.

As a registered broker-dealer, Edward Jones is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.

A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.

Edward Jones Has Many Different Regulatory Problems 

Edward Jones’ rapid growth has not been without consequences. There have been approximately 76 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against Edward Jonesfor misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Edward Jones is a repeat offender: there are over 76 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Edward Jones Has Faced Over the Years*

Edward Jones has been repeatedly censured, warned, and fined multi-millions of dollars for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

Washington State Securities Division Fines Edward Jones for Failure to Supervise Financial Advisor Who Received $550,000.00 from an Elderly Client

Brief Overview: The Washington State Department of Financial Institutions Securities Division alleged that between 2017 and 2021, Edward Jones failed to supervise a former financial advisor, who the division alleged received payments of gifts and loans totaling approximately $550,000.00 from an elderly client without disclosing the payments to Edward jones. The division further alleged that Edward Jones failed to detect the financial advisor’s undisclosed outside business. As a result, the firm was fined $175,000.00.

Edward Jones Censured and Fined for Failing to Produce Call Records in Response to FINRA Document Requests

Brief Overview: Without admitting or denying the findings, Edward Jones consented to the sanctions and to the entry of FINRA findings that it failed to timely, completely, and accurately produce certain phone records in response to FINRA’s requests for documents in connection with its investigations into allegations of potential misconduct, including unauthorized trading, discretionary trading, and excessive trading. FINRA stated that in responding to these requests, the firm failed to search a storage location it used with an analytics tool for business planning, not retention or production, purposes that contained call detail records older than 18 months and thus housed responsive documents. In addition, in most of the investigations, the firm inaccurately represented in the text of its responses or in a legend attached to its productions, that records older than 18 months were not available. As a result, Edward Jones was fined $1.1 million. 

Nevada Securities Division Fines and Orders Edward Jones to Cease-and Desist for Failure to Supervise Financial Advisor

Brief Overview: The Nevada Securities Division alleged that Edward Jones failed to establish and maintain a system to supervise the activities of its associated persons that is reasonably designed to achieve compliance with the Nevada Securities Act. Specifically, that the firm failed to supervise a former financial advisor who had offered and sold personal seat licenses (personal seat licenses for professional football team) to an Edward Jones client. The division also alleged that the former financial advisor never delivered the personal seat licenses to the client. As a result, Edward Jones agreed to pay $50,000.00 and $2,762.57 as a civil penalty and investigatory costs.

Edward Jones Consents to South Dakota Division of Regulation Findings that the Firm Failed to Supervise Financial Advisor’s Mutual Fund Sales

Brief Overview: Without admitting or denying the allegations, Edward Jones agreed to a consent order with the South Dakota Division of Regulation to resolve a matter involving the firms’ alleged failure to supervise a single financial advisor in connection with that financial advisor’s recommendation of certain mutual funds to the customer in violation of the South Dakota Securities Act and FINRA Rules 2010 and 3110. Edward Jones agreed to pay the division $10,000 for the costs of their investigation and to make an offer of settlement to the customer in the amount of $2,406.47.

FINRA Censures and Fines Edward Jones for Filing Misleading U4s

Brief Overview: Without admitting or denying the findings, the Edward Jones consented to FINRA sanctions and to the entry of findings that it filed forms U4 containing misleading information about the amount of alleged damages in customers’ complaints. FINRA stated that the firm’s disclosures of customer complaints understated the customers’ alleged damages. The inaccuracies in the firm’s form U4 filings resulted from a misunderstanding by certain of its associates about the applicable requirements for disclosing customers’ complaints. FINRA identified the inaccuracies, and the firm was censured, fined $40,000, and ordered to certify in writing that the firm has reviewed its systems, policies, and procedures governing the firm’s review, analysis, and disclosure of alleged damages in customer complaints and that the firm has established and implemented systems, policies, and procedures governing the review.

Why Does Edward Jones Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Edward Jones Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Edward Jones is responsible like any employer for its financial advisors’ acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Edward Jones without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Edward Jones Today!

The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Edward Jones cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 45 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

Rate this Post

Loading...