Three years in, Finra continues to smite broker-dealers over un-waived A shares loads. This time its five Cetera Financial Group B-Ds in hot water, though not as hot as it could have been.

On Monday the regulatory agency unveiled settlements (totaling $3.3 million) with: Cetera Financial Specialists, Cetera Investment Services, First Allied Securities, Girard Securities (which is shutting down and shifting to be a piece of another Cetera B-D, Cetera Advisor Networks), and Summit Brokerage Services. Back in May Finra unveiled a similar settlement with Cetera Advisor Networks. All five new settlements involve only restitution, as Cetera IDed the problem internally and reported it to Finra.

InvestmentNews covered the settlements.

The new Cetera settlements (in which the B-Ds neither admitted nor denied the allegations) are over a now-familiar Finra issue in recent years: retirement plan and charity customers who were eligible for load-waived A shares but whose FAs instead sold them A shares with loads (or back-end load B shares or higher trail C shares). That same issue led Finra three years ago to hit Merrill with a $8 million fine, plus ordered $64.8 million in restitution. Since then numerous B-Ds have faced similar issues, with many of them responding like the Cetera firms by voluntarily reporting the problem and paying restitution in exchange for avoiding fines.  

Edited by: Neil Anderson, Managing Editor


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