The firm admitted it failed to prevent the double charging of clients who held mutual funds that paid embedded fees within fee-based accounts
The lawsuit has been filed on behalf of discount brokerage clients who allegedly paid excessive management fees on mutual mutuals
MFDA publishes investor bulletin on mutual fund fees
Similar cases have been filed against 1832 Asset Management and TD Asset Management
The move is intended to reduce regulatory uncertainty following the CSA’s plan to propose rule changes
The announcement follows a similar proposal against TD Asset Management launched in April and the CSA’s proposal to ban mutual fund firms from paying discount brokerages trailer fees
Industry groups and investor advocates agreed on some of the proposed rules, but opinions were divided on the decision to allow embedded commissions to remain in place
Dealers and advisors can breathe a sigh of relief that there is no blanket ban on trailer commissions and no statutory best interest standard
But regulators are banning DSCs and enhancing regulatory requirements for registrants to avoid situations that place them in a conflict of interest
Most advisors surveyed for this year's Dealers' Report Card were strongly against regulators banning embedded commissions