Edward Jones settles with California

By Legal News Line | Sep 9, 2008

ST. LOUIS, Mo. (Legal Newsline)--A lawsuit filed in 2004 by then California Attorney General Bill Lockyer against Edward Jones, a Missouri-based brokerage firm, has been settled.

Filed in December 2004, the attorney general's office accused Edward Jones of failing to adequately disclose its sharing of revenue with mutual fund companies when it sold their funds to customers before 2005.

Edward Jones has agreed to pay $7.5 million in fines and fees to settle the lawsuit. The company did not admit or deny the allegations. Revenue-sharing must be disclosed. Jones will pay California $2.7 million in fees and $4.8 million in civil penalties.

In 2006, the brokerage company paid $127.5 million to settle several class-action suits filed for the same reasons.

"We are pleased that we were able to negotiate a settlement with the California attorney general and put the issue of revenue-sharing disclosure behind us," Jim Weddle, a managing partner, said in a statement.

"Although we believe all relevant issues regarding adequate disclosure to our clients were addressed as a result of the 2004 settlement [with federal officials], we respect the attorney general's concerns and his responsibility to California residents," Weddle added.

When announcing the lawsuit in 2004, then Attorney General Bill Lockyer said the company "broke the law, and broke faith with the working families of California who placed their trust in the company's investment recommendations."

Lockyer, a Democrat, said the company collected "some $300 million in secret payments from mutual funds," and demanded full disclosure.

"Investors deserve nothing less," Lockyer said. "I will settle for nothing less from Edward Jones."

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