California Sues Edward D. Jones Over Mutual Fund Deals

California Attorney General Bill Lockyer has filed suit on behalf of the state against brokerage firm Edward D. Jones, claiming improper marketing of mutual funds, Reuters reported.

The suit also takes issue with a $75 million settlement reached between Jones and the Securities and Exchange Commission, which he called "inadequate for a national settlement."


AccountingWEB is pleased to bring you tools that can help systematize the accounting department of a small company, corporate business or a public accounting firm. Over 200 accounting department policy templates, written in Microsoft Word format by PolicySoft, are available individually or in groups for immediate download.

Accounts Payable General Accounting Department
Accounts Receivable General Ledger
Credit & Collections Payroll
Fixed Assets Shipping & Receiving

Lockyer stated that Jones should have disclosed arrangements it had with seven “preferred” mutual fund groups who allegedly paid Jones for promoting and selling their shares, Reuters reported.

"The documents we have obtained show Jones blatantly disregarded investors' interests as it collected some $300 million in secret payments from mutual funds," Lockyer said.

He criticized a $75 million settlement between Jones and the Securities and Exchange Commission as "inadequate for a national settlement."

Based in St. Louis, MO, Jones has more than 9,000 offices in the United States, Canada and Britain. Reuters reported that the company could not be reached for comment and that the SEC declined to comment.

The California suit claims that seven mutual fund groups were involved in the "shelf space" agreements with Jones, including American Funds, Federated Investors Inc. (FII.N: Quote, Profile, Research), Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research), the Hartford mutual funds, Lord Abbett & Co. LLC; Putnam Funds, a unit of Marsh & McLennan Cos. (MMC.N: Quote, Profile, Research); and Van Kampen Investments, Reuters reported.

The sale of these funds comprised about 98 percent of all Jones' mutual fund sales from January 2000 through the present, according to the state's complaint.

You may like these other stories...

For the first time since 2006, more than 50 percent of CFOs believe the US economy will show signs of improvement over a six-month span rather than remain the same or worsen, according to a new study from Chicago-based...
By Jason Bramwell, Staff Writer CPAs in New Jersey, New York, and Pennsylvania believe economic conditions in the United States will likely be the same one year from now, and while they predict higher business revenues...
By Jason Bramwell Managers in accounting, finance, and IT are cautiously optimistic about their hiring plans for the fourth quarter of 2013, according to a new hiring outlook survey from staffing firm Brilliant. ...

Already a member? log in here.

Upcoming CPE Webinars

Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.