James Brown, Montana State Auditor, Announces Multi-State Settlements with Major Broker-Dealers Over Excessive Retail Equity Commissions

FOR IMMEDIATE RELEASE

Helena, Montana—James Brown, Montana Commissioner of Securities and Insurance, in coordination with securities regulators from Alabama, Iowa, Massachusetts, Missouri, Texas, and Washington, today announced national settlements with five major broker-dealer firms—Edward D. Jones & Co., L.P. (Edward Jones), LPL Financial LLC (LPL), RBC Capital Markets, LLC (RBC), Stifel, Nicolaus & Company, Inc. (Stifel), and TD Ameritrade Inc. (now part of Charles Schwab)—resolving allegations that these firms charged unreasonable minimum commissions to retail customers on small principal equity transactions in violation of state securities laws.

The coordinated investigations of the states are ongoing with regard to several additional firms.

“These coordinated settlements send a clear message both that excessive commissions on small trades by main street customers are unacceptable and that investor protection remains a top priority for state securities regulators,” said Montana Commissioner James Brown. “We encourage all Montana investors to review their account statements and contact our office if they have questions about commissions charged on their trades.”

BACKGROUND AND FINDINGS

A multi-state task force, which included the Montana Auditor’s Office, launched investigations in July 2023 after identifying patterns of minimum commission charges that often exceeded 5% of the principal amount on small equity trades. The investigations found that, between 2018 and 2025, the five firms collectively charged excessive commissions on hundreds of thousands of retail transactions, resulting in millions of dollars in aggregate overcharges to main street investors nationwide.

Key findings include:

• Edward Jones: Approximately 781,240 transactions resulting in excessive commissions totaling $11,287,504 from May 2020 to April 2025.
• LPL Financial: 127,045 transactions resulting in excessive commissions totaling $2,486,739.20 between April 2020 and April 2025.
• RBC Capital Markets: 89,900 transactions resulting in excessive commissions totaling approximately $3,400,000 from May 2020 to May 2025.
• Stifel, Nicolaus & Co.: 45,352 transactions resulting in excessive commissions totaling $885,480.13 from May 2020 to April 2025.
• TD Ameritrade (Charles Schwab): 84,618 transactions resulting in excessive commissions totaling $913,223 from June 2018 to June 2023.

SETTLEMENT TERMS

Without admitting or denying the findings, all five firms have agreed to the following terms:

• Restitution: Affected customers will receive restitution equal to the amount of commission charged in excess of 5% of the principal trade amount, plus 6% interest, for the relevant period in each settlement, with certain limited exclusions, such as a $10 de minimus cut-off.
• Fines and Costs: The firms will pay administrative fines ranging from $795,000 to $5,300,000; this amounts to fines ranging from $100,000 to $15,000 per state, depending on the firm.  The firms will also pay investigative costs to the lead states, including Montana, ranging from $5,000 to $35,000 per state. 
• Policy Changes: Each firm must certify that it has reviewed and revised its policies, procedures, and compliance systems to ensure commissions on equity transactions do not exceed 5% of the principal amount and that all transactions are monitored for excessive commission charges.
• Cease and Desist & Censure: The firms are censured and must permanently cease and desist from charging unreasonable commissions and from failing to supervise the application of minimum commission charges.
• No Disqualification: The settlements are not intended to serve as a basis for disqualification from registration or membership with securities regulators or self-regulatory organizations.

The settlements will result in millions of dollars in restitution to retail investors, including Montana investors, who were overcharged on small equity trades. Customers eligible for restitution will be contacted directly by their broker-dealer with information about their payment.

Commissioner Brown said of the settlements, “I have directed this important state agency to be a strong advocate for Montana’s consumers, and the excellent outcome of these settlements is evidence that my directive is being met.  Investment companies must act responsibly and must act in the best interests of their customers”.

The Montana Securities Division, part of the Office of the Commissioner of Securities and Insurance (CSI), is committed to protecting investors, promoting fair and efficient markets, and ensuring compliance with state securities laws.

For more information, contact:
David Sanders
Chief of Staff
406.437.1381  |  dsanders@mt.gov

Commissioner of Securities and Insurance, Securities Division
Kirsten Madsen, Deputy Securities Commissioner
406.444.3815  |  csi.securities@mt.gov

The Montana State Auditor, Commissioner of Securities and Insurance, regulates the insurance and securities industries in Montana. The State Auditor
is also an ex officio member of the Montana Board of Land Commissioners. James Brown was elected Montana State Auditor in 2024.

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