SACRAMENTO (CN) – Securities broker Edward Jones agreed to pay $7.5 million dollars Wednesday, in a settlement with the California Attorney General after the company failed to disclose revenue-sharing agreements with 90% of the mutual funds it sold and failed to disclose the resulting conflict of interest to its clients.
“About 90% of the mutual funds they sell are with companies in the revenue-sharing agreements” says Christine Gasparac, the Press Secretary for the Attorney General’s office.
Edward Jones, which is based in St. Louis, Missouri, is a securities broker.
Under the charges, the company recommended certain mutual funds to their clients in exchange for payments from the promoted mutual funds.
The settlement is for violating California’s securities laws.
The company has already paid $75 million in a related settlement for violating federal securities laws, and agreed to change its disclosure policies.
Under the terms of the recent settlement, the $7.5 million will go towards civil penalties, fees, and costs.
Mark Breckler is representing California. Edward Jones is represented by lawyers from Keesal, Young & Logan and Greensfelder, Hemker & Gale.