California regulators on Monday filed a securities fraud lawsuit against brokerage house Edward D. Jones alleging the firm failed to disclose shelf space payments it received from seven mutual funds to promote and sell those funds.

"Edward Jones broke the law…The documents we have obtained show Jones blatantly disregarded investors' interests as it collected some $300 million in secret payments from mutual funds," said Attorney General Bill Lockyer, in a prepared statement. "California law requires full disclosure of information that raises questions about whether broker-dealers' recommendations serve clients' best interests. Investors deserve nothing less. I will settle for nothing less from Edward Jones."

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