Invest Financial Corporation (CRD#: 12984) is a broker-dealer that is based in Tampa Bay, Florida.
At Sonn Law Group, our experienced securities fraud attorneys are currently investigating any and all customer complaints against this firm.
Invest Financial Corporation: Customer Disputes and Regulatory Actions
Do you have a complaint about Invest Financial Corporation? We want to hear it.
Mutual Fund Negligence: Failure to Apply Discounts
In February of 2017, FINRA’s Department of Enforcement censured Invest Financial Corporation and fined the firm $225,000. Full details regarding this case can be accessed by using FINRA’s Disciplinary Actions tool and referencing case number 2015046036301.
According to FINRA, Invest Financial Corporation improperly disadvantaged several of its clients (both retirement funds and charity funds) by selling mutual funds without properly applying eligible discounts. Beyond the fine, Invest Financial Corporation was ordered to pay full restitution to the affected investors. When figuring in the interest, financial restitution amounted to more than $504,000.
Unit Investment Trusts (UITs): Overcharging Customers
This brokerage firm has had other recent problems with overcharging its investors. In April of 2016, FINRA investigators determined that Invest Financial Corporation charged its clients excessive, unjust fees when selling Unit Investment Trusts (UITs). In all, 2,809 transactions were completed with a higher commission rate than was appropriate given the circumstances.
As a result, investors were forced to pay $398,401.30 in unfair fees to the firm. FINRA enforcement officials ordered the broker-dealer to pay full financial restitution to all affected customers. On top of financial restitution, FINRA also hit the firm with a $175,000 fine and ordered it to pay $45,000 in interest.
Registered brokerage firms have a legal duty to always look out for the best interests of their clients. This duty takes many different forms. Though, one of the most basic forms is making sure that investors get the best available price on any trade. When investors are overcharged fees, their ability to make a solid return is greatly diminished.
Whether brokerage firms are overcharging customers intentionally or because of negligence, it must be stopped. If you have been charged excessive, unlawful fees or commissions by Invest Financial Corporation, you are entitled to compensation for your damages.
Violations of the Anti-Reciprocal Rule
In 2005, the National Association of Securities Dealers (NASD), the forerunner to the Financial Industry Regulatory Authority (FINRA), charged eight firms with serious directed brokerage violations. In total, the broker-dealers were ordered to pay a collective $7.75 million in fines, with Invest Financial Corporation being hit with the single largest fine of the group, at $1.52 million.
All of the fines in this case were issued as a result of the brokerage firm violating the industry’s anti-reciprocal rule.
Essentially, the anti-reciprocal rule prevents companies from favoring the sale of certain mutual fund products, simply on the basis that the firm received an increased commission payment for that specific product. Put another way, when a broker recommends a mutual fund to one of their investors, the commissions can play no role in that recommendation.
Sadly, in this case, Invest Financial Corporation and several other brokerage firms violated the anti-reciprocal rule in a systematic way. The brokers found complex ways to try to beat the system. For example, Invest Financial Corporation gave a certain mutual fund a privileged space on its website in order to drive more business for that fund. In return for the preferential treatment, the mutual fund gave the brokerage firm an especially large commission on each sale.
FINRA still has an anti-reciprocal rule in place. Brokers and brokerage firms may not set up arrangements to try to push specific mutual funds in return for a self benefit.
This type of conduct creates a blatant conflict of interest, and it disadvantages innocent investors. As an investor, you need to be able to rely on your brokerage, but you cannot do so if the firm has conflicting financial interests in recommending investment products.
At Sonn Law Group, we are ready to fight hard to ensure that you recover every penny you deserve. If you or a loved one has a complaint regarding Purshe Kaplan Sterling Investments, call Jeff Sonn at 844-689-5754 for a free case consultation.