Erez Law is currently investigating Cetera Advisor Networks LLC regarding not providing applicable mutual fund sales-charge waivers for select customers, resulting in eligible customers being overcharged by at least $1,666,404 for mutual fund purchases made since July 1, 2009. Cetera Advisor Networks LLC is headquartered in El Segundo, California and has approximately 3,100 registered persons and maintains approximately 1,225 branch offices.
According to the Acceptance, Waiver & Content, Cetera Advisor Networks LLC was ordered to pay restitution to eligible customers totaling $1,911,080 (inclusive of interest) and censured and required to provide a remediation plan to FINRA to remediate eligible customers who qualified for, but did not receive, an applicable mutual fund sales-charge waiver. Cetera Advisor Networks LLC consented to the sanctions and to the entry of findings that it disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares in certain mutual funds without a front-end sales charge. The FINRA investigation found that customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses.
According to the FINRA investigation, Cetera Advisor Networks LLC failed to reasonably supervise the application of sales-charge waivers to eligible mutual fund sales, and instead relied on its financial advisors to determine the applicability of sales-charge waivers. Additionally, Cetera Advisor Networks LLC failed to maintain adequate written policies or procedures to assist financial advisors in making this determination and the firm failed to notify and train financial advisors regarding the availability of mutual fund sales-charge waivers for eligible customers. It is also alleged that Cetera Advisor Networks LLC did not have adequate controls to detect instances in which they did not provide sales-charge waivers to eligible customers in connection with their mutual fund purchases.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Cetera Advisor Networks LLC may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against Cetera Advisor Networks LLC regarding not providing applicable mutual fund sales-charge waivers for select customers. If you were a client of Cetera Advisor Networks LLC or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.