Firm to Pay $34.8 Million Because Faulty Computer Coding Overcharged Clients
A large broker-dealer agreed to pay $2.8 Million in fines and another $32 Million in remediation for overcharging clients as a result of computer coding problems. According to FINRA, flaws in the firm’s systems resulted in charging commissions on ineligible securities, applying incorrect fee schedules, failing to rebate certain sub-accounting fees, failing to aggregate client accounts, and imposing wire transfer fees. FINRA alleges that the firm overcharged over 90,000 customers over an eight year period. FINRA also charges that the firm failed to deliver required trade confirmations for mutual fund wrap accounts for non-scheduled transactions, did not properly disclose its status as agent/principal, and failed to deliver proxy materials.