FINRA Fines Five Broker-Dealers for Improper Handling Fees (Press Release)

FINRA News Release

September 7, 2011

FINRA announced fines against five broker-dealers for understating the amount of total commissions it charged customers and for mischaracterizing a portion of commission charges as fees for "handling services." The cases were the result of a targeted review by FINRA that found that firms were routinely charging customers for handling services that far exceeded the actual cost of such services.

The disciplinary action is significant in that it involves firms overcharging in small amounts (that can obviously add up) on agency commissions, as opposed to a more ordinary markups case.

Cross References

FINRA Rule 2010

NASD Rules 2010, 2430

Exchange Act Rule 10b-10