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RJ & Makay

Our view of news, events and human capital trends in the financial services industry.
Tags >> Salomon Whitney LLC

FINRA cracks down on broker-dealers for excessive handling fees

Posted by RJ and Makay on Sep 09, 2011

The Financial Industry Regulatory Authority (FINRA) on Wednesday announced that it has  levied fines against five broker-dealers, totaling nearly $1 million, for gouging clients in “postage and handling” fees. FINRA said that the five firms were “understating the amount of total commissions charged to customers in trade confirmations and fee schedules by characterizing a portion of the commission charges as fees for handling services.”

In some cases, customers were charged upwards of $100 per transaction for handling fees, and firms earned a substantial portion of their revenues from these fees.