News & Analysis as of

Broker Commissions

SEC Staff Allows Brokers to Set Commissions for Mutual Fund “Clean Shares”

by Carlton Fields on

On January 11, the SEC staff issued an interpretive letter to the Capital Group (CG Letter) stating that Section 22(d) of the Investment Company Act does not prevent brokers from charging commissions for effecting...more

The problem with Morgan Stanley’s payment decision

by Ary Rosenbaum on

As you probably heard, Morgan Stanley will be moving to a level compensation approach for its 401(k) advisors. So this means it will do away with commission payments and finder’s fees (for recommending record-keeping...more

DOL Fiduciary Rule Compliance—SEC Says Brokers Can Impose Their Own Commissions on Sales of “Clean” Fund Shares

by Ropes & Gray LLP on

On January 11, 2017, the SEC staff issued a no-action letter (the “Letter”) to Capital Research and Management Company in which the staff confirmed that the restrictions of Section 22(d) of the 1940 Act do not apply to a...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

Merrill Lynch has already staked out the position in response to the DOL’s retirement account fiduciary duty rule that it would no longer offer commission-based IRAs to retirement savers. Yesterday, it effectively doubled...more

SEC Charges State Street Employee For Fraudulent Fees

by Dorsey & Whitney LLP on

Transition Management is a service offered by securities professionals to pension funds and other investment managers who are changing fund managers, investment managers or making similar transitions and need to make...more

US Department of Labor’s Fiduciary Rule Introduces a Brave New World

by Latham & Watkins LLP on

Final rule reflects some concessions, but its broad scope and compliance costs will cause financial services advisers to re-evaluate their business models. On April 6, 2016, the US Department of Labor (the DOL) released...more

SEC Files Another In A Series of Actions Tied to Secret Commissions

by Dorsey & Whitney LLP on

The Commission brought another in a series of actions centered on ConvergEx Execution Solutions LLC and its affiliates. As with the prior actions, this one centered on secretly adding substantial commissions to transactions...more

The DOL Fiduciary Rule and Potential Limitations On Investor Choice

by Bryan Cave on

On Wednesday, April 6, 2016, the United States Department of Labor (the “DOL”) released the final version of its rule imposing a “best interest” fiduciary standard on financial professionals who provide retirement savings...more

New Rule Governing Retirement Advice Shakes Up Traditional Broker Compensation

On April 6, 2016, the U.S. Department of Labor released its long-awaited and controversial fiduciary rule expanding the definition of who is a fiduciary when providing investment advice on retirement accounts. The rule aims...more

Former Texas AG, Computer Company Charged by SEC With Fraud

by Dorsey & Whitney LLP on

A former Texas Attorney General and state representative combined with others at a computer firm to promote the shares of the company which claimed to compete with Dell, Apple and others. About $26 million in stock was sold...more

In Reinsurance-Related Commission Dispute, Court Grants Defendant Leave To Amend Answer Rather Than Grant Plaintiff Summary...

by Carlton Fields on

A lawsuit filed in the United States Court for the District of Connecticut between Odyssey Reinsurance Company and Cal-Regent Insurance Services Corporation involves a dispute over commission payments in a reinsurance scheme...more

FINRA Bars Former President Of Broker-Dealer Along With Former Registered Representatives

Reflecting increased regulatory willingness to discipline principals and supervisors, FINRA recently announced that it had imposed an industry bar on the former president of a defunct broker-dealer, along with five registered...more

Broker Commissions: Technical Requirements Trump Equitable Considerations

by Pepper Hamilton LLP on

In re Oak Knoll Assocs., L.P., 525 B.R. 175 (Bankr. D. Me. 2015) – A real estate broker sought allowance of an administrative expense claim for his commission in connection with a sale of real estate.  The debtor and...more

Show Us the Money: FINRA Initiates Sweep Relating to Compensation Practices

FINRA has made no secret of its interest in broker compensation, and the potential conflicts of interest that can be generated by some types of compensation practices. FINRA discussed these issues in its 2015 annual...more

(US) Commercial Real Estate Brokerage Agreements: Imprecise Commisson Language Can Cost You

by Reed Smith on

It would be unfair (and likely bad faith) for a property owner to terminate a brokerage agreement prior to entering into a sales agreement or lease just to avoid paying a real estate commission. Yet, if a property owner is...more

It’s Time to Rewrite Wisconsin’s Single-Party Listing Agreement

by Foley & Lardner LLP on

A note to the drafters of Wisconsin’s single-party listing contract: It’s time to redefine what triggers the payment of a commission under the contract after a recent decision of Wisconsin’s supreme court in Ash Park, LLC v....more

A Tale of Two Annuities: Exchange of Variable for Fixed Annuity Integral in SLUSA Dismissal

by Carlton Fields on

After attending an annuity seminar, Robert and Diane Ruud exchanged their variable annuity for a fixed annuity sold by PHL Variable. According to the Ruuds, seminar provider John Friendshuh represented the fixed annuity as...more

Wisconsin's Supreme Court Creates More Power for the Arbitrator

by Foley & Lardner LLP on

Most commercial litigators know that a circuit court will enforce an arbitration agreement as long as a given dispute falls within the agreement’s scope. What is or is not within the scope of an agreement, however, has not...more

Fifth Circuit Finds Parties Can Authorize Arbitrators By Their Conduct

The Fifth Circuit un-vacated an arbitration award last week, holding the district court had wrongly concluded that the court was the proper decision-maker on contract formation.  Although courts are presumptively authorized...more

An Update on Dealing Commissions and Market Abuse

Last week the Financial Conduct Authority (FCA) published two papers likely to have a significant impact on the day-to-day operation of investment fund managers in the immediate and medium term....more

Summary Judgment Affirmed by Sixth Circuit in Broker Commission Price-Fixing Litigation

by McDermott Will & Emery on

On November 13, 2014, the Sixth Circuit Court of Appeals upheld the dismissal of price-fixing claims against two home brokerage service firms in Kentucky, McMahon Co. and HomeService of America, Inc. Hyland, et al. v....more

Reverse Churning

by Burr & Forman on

It is obvious that broker-dealers and their registered representatives, as well as investment advisors, must be careful in making recommendations to their clients. But the rise of claims related to inaction in a client...more

Claims Against Loan Servicer And Force-Placed Insurer Alleging Commission And Reinsurance Kickback Scheme Survive Dismissal

by Carlton Fields on

A putative class action involving force-placed home insurance and an alleged scheme for mortgage lenders to obtain kickbacks in the form of commissions, reinsurance premium, and other fees, has survived a motion to dismiss. ...more

SEC Sanctions Investment Adviser for Pushing Class A Shares When Investors Qualified to Buy Institutional Class Shares

The Securities and Exchange Commission sanctioned an investment adviser and its owner for failing to seek best execution and breaching their fiduciary duty in selecting mutual fund share classes for three advisory...more

Burr Alert: Proposed FINRA Rules Governing Markups, Commissions And Fees

by Burr & Forman on

Through its recent Regulatory Notice 13-07, the Financial Industry Regulatory Authority ("FINRA") announced and sought comments on its proposed amendments to rules governing markups, markdowns, commissions and fees associated...more

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