Edward D. Jones reached a tentative settlement on nine class-action lawsuits for not telling investors it accepted revenue-sharing payments from mutual fund companies to promote their funds. The settlement still must be approved by the United States District Court for the Eastern District of Missouri. The $127 million settlement calls for $55 million in cash and $72.5 million in non-cash vouchers to current customers over three years. In addition, the company must cover legal fees.
Edward D. Jones reached a $75 million settlement with the U.S. Attorney General in 2004 following an SEC investigation that found it had failed to disclose revenue-sharing agreements with seven mutual fund companies: American Funds, Federated Investors, Goldman Sachs, Hartford Mutual Funds, Lord Abbett, Putnam Investments and Van Kampen Investments. In settling, the company avoided criminal charges from the Department of Justice.