Pleasanton, California — California's Department of Financial Protection and Innovation ordered five brokerage firms to refund more than $1.3 million to customers who were charged excessive commissions on small-dollar transactions.
The July 1 enforcement action targeted Edward Jones, LPL Financial, RBC Capital Markets, TD Ameritrade, and Stifel, Nicolaus & Company. Regulators said the five firms collectively charged roughly $19 million nationwide in excessive commissions over a five-year period covered by the investigation.
California securities law prohibits unreasonable commissions, and the Financial Industry Regulatory Authority suggests a markup of 5 percent or less as fair. The state investigation found tens of thousands of transactions in which commissions exceeded that threshold, the department said.
DFPI Commissioner KC Mohseni said the firms were supposed to help people invest and manage their money, but that the excessive fees made it harder for consumers to get ahead financially, particularly on small transactions. The department framed the action as part of a broader effort to reduce hidden fees and opaque charges that prioritize sales over clients.
