SunTrust Securities and the Securities and Exchange Commission have reached a settlement over mutual fund breakpoint violations. The settlement is concurrent with cease-and-desist proceedings against the broker-dealer. Consequently, SunTrust has agreed to issue refunds with interest compounded , in addition to a commitment to stay away from any future breaches of security regulations.
"SunTrust Securities failed to provide all available breakpoint discounts even after the Commission staff had alerted SunTrust Securities to prior deficiencies," the SEC stated. Continued violations led to the most recent order on May 17, which confirmed the failure to provide reduction in front-end loads owed to high-level mutual fund investors over the period of 2001 to 2002. The brokerage firm has consented to the order but neither agreed to nor denied the findings.
The NASD has estimated through statistical analysis that SunTrust customers were overcharged by approximately $201,117, but the SEC has not specified the amount of the restitution.
SunTrust Securities is the brokerage division of SunTrust Bank, the nation's seventh-largest bank with year-end 2004 assets of $158.9 billion.