SEC Fines A.G. Edwards for Failure to Supervise
Add A.G. Edwards to the long list of firms that have been fined by the SEC for long-ago failures to supervise brokers who deceptively market timed mutual funds.
The SEC announced today the $3.86 million settlement with the St. Louis-based brokerage for failing to properly monitor its reps between January 2001 and September 2003. (Read the SEC release here.) “By failing to develop or adopt reasonable policies to prevent its registered representatives’ misconduct, A.G. Edwards ignored its responsibility to reasonably supervise its registered representatives,” said Merri Jo Gillette, regional director of the SEC’s Chicago regional office. No one at Edwards was available for comment at the time of this writing.
As part of the settlement A.G. Edwards agreed to hire an independent consultant to review whether the changes the firm has made since the infractions took place are sufficient to prevent and detect future market timing activity.
Edwards joins a growing list of firms dinged for “failing to supervise” brokers who engaged in market timing. But if the firm can be thankful for something, it’s the size of its fine. When compared to similar settlements in the recent past, $3.86 million is a pittance: Prudential Equity Group, the subsidiary b/d of Prudential Financial, was fined $600 million in August 2006 (read here); Bear Stearns was fined $250 million in March 2006 (read here); and UBS was fined $50 million in January 2006 (read here).
