Edward Jones Executive to Depart
The top executive of Edward D. Jones & Co. will step down at the end of next year, agreeing to pay about $3 million of a $75-million settlement with the Justice Department over claims tied to the company’s mutual fund sales practices.
Douglas Hill’s planned exodus as managing general partner -- a title he has held for a year -- was revealed Monday in a filing by the St. Louis-based brokerage with the Securities and Exchange Commission.
The announcement came nearly a week after Edward Jones agreed to pay $75 million to settle allegations of improper disclosure of revenue-sharing payments.
The company, which did not specify possible payouts by any other executives, said it would take a $50-million charge against its fourth-quarter earnings. The other $25 million will come from existing legal reserves.
The SEC last week closed its probe of Edward Jones after finding that the company created a conflict of interest by failing to disclose a revenue-sharing deal with seven “preferred†mutual fund groups. The SEC will distribute the $75-million settlement to Edward Jones customers.
The revenue-sharing agreement provided “tens of millions of dollars†to Edward Jones, the SEC said. Though the SEC did not cite a specific amount, a lawsuit filed against Edward Jones by the state of California said the brokerage accepted $300 million in improper payments to push its clients toward certain mutual funds.
California Atty. Gen. Bill Lockyer refused to participate in the settlement, saying investors in his state deserved a larger payout.
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