Revenue Sharing Review at EJ

or Register to post new content in the forum

53 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Dec 11, 2005 10:32 pm

Forgive me for re-introducing this topic again, but I am not yet clear on it from the anti-Jones people here.


It is my understanding the revenue sharing issue dealt primarily with a failure to verbally disclose that revenue sharing was taking place for the 7 preferred fund families, even though the practice was disclosed in the prospectus. The change now is that the revenue sharing is also disclosed verbally.


I also understand that EJ at one time included revenue sharing as part of the criteria for awarding diversification trips, but pulled this back on their own before the investigation began.


Is this understanding correct? And is EJ's past revenue sharing practices substantially different from the other firms?


I should add that I am proud to work at Jones and have yet to have a client reject a preferred fund because of my verbal disclosure of revenue sharing.

Dec 11, 2005 11:28 pm

You work there and don't understand the system?!!!  Drink up...

Dec 12, 2005 8:24 am

No, I don't understand why so much is made of it here.

Dec 12, 2005 8:37 am

butkus, my thoughts on it are much more than that.  Most selling agreements don't involve additional fee to play deals beyond basic rev. sharing that already exists in traditional pricing.  Where jones took it farther is they got $$$$ on top of that w/o it being disclosed to clients and unargueably causing its sales force to steer clients to those funds.  In terms of the trips - they may have pulled them back as you state but what if the suit never came to light?  Would jones have changed it still?  Also, jones IRs receive bonuses based on p/l of their office.  One of the easiest ways to makes this happen is to do business w/ the preferreds.  Do you disclose this to your clients?  Is this disclosed in the prospectus?


Beyond that, all the kool-aid drinkers on this post get on and spout how Jones is the only firm out there looking after the client; I believe this if the client in that sentence was the GPs.

Dec 12, 2005 10:13 am

P/L credits are no longer tied to the preferred fund families.  Has not been for almost a year.  There is now a line item on the P/L called "asset holding credit" which takes all assets into account (stocks, bonds, all mutual funds, UITs, money market funds, etc.) when calculating indvididual branch profit.  I am not pining for Jones, but I think it is important that we have the facts straight on this forum.

Dec 12, 2005 10:33 am

Again, you EJ geeks  don't get it.    Doug Hill and the other GPs LIED on their Wells Submission to the SEC.  When the SEC realized that EDJ/Hill knowingly submitted inaccurate statements (aka lied)to  the SEC referred to the US Attorney office in Eastern Missouri. (aka THE PROSECUTOR)   Rather than face a multi-count CRIMINAL indictment Doug et all coughed up a $75 million SETTLEMENT (aka not a fine) and Doug agreed to step down as MR. BIG.   Lieing to the SEC is what Martha went down to the Federal Pen for!   


What do you guys feel about your bosses lyin' to the Feds


As always


Lance



Dec 12, 2005 11:03 am

Thx soothsayer - I appreciate the info and setting me straight.

Dec 12, 2005 11:04 am

Any idea though on how they weigh all of the assets?  That is, do some products get more weighting toward p/l v others?



Again, thx.

Dec 12, 2005 6:48 pm

Only based on total aum in the branch, it has nothing to do with what the assets are.


Dec 13, 2005 6:07 pm

So where is the problem here?


Lance, you might substantiate the fraud charge, as Martha Stewart went to jail but Doug Hill is not.

Dec 13, 2005 6:27 pm

Martha was a idiot and rather than admitting she lied to the SEC and settle with them she chose to fight it in Federal Court -she lost!



Most of the Jones boys on this post still think that Jones paid a $75 million FINE to the SEC for revenue sharing practices. WRONG!



EDJ entered into a deferred settlement with the US Attorney (aka The Prosecutor) for the Eastern District of MO. Part of that settlment was a $75 million payment. The last time I looked the US Attorney Office was a part of the Department of Justice not the SEC!



Ya see fellas it is illegal to knowingly submit inaccurate (lie)information on an SEC Wells Submission. When that happens the nice people from the SEC refer the matter to the DOJ for prosecution! Doug and the big boys decided to lie about the revenue sharing stuff. They were facing Federal Indictment abd Doug would have been arrested on a series of criminal charges....why else would they have shelled out $75 million to THE PROSECUTOR?   



Read my post "I do not hate Edward Jones" it has the time line for you.... or just call the US Attorney office in St. Louis they will provide you with copy of the settlement agreement.

Dec 13, 2005 11:17 pm

A link supporting your claim would be nice.

Dec 13, 2005 11:44 pm

ButtHead



Just go to my " I do not hate Jones thread" somebody posted the
official press release from the US PROSECUTOR about the settlement



My claim doesn't need any support...just call US Attorney office at
314-539-7719 and they will fax you a copy of the December 2004
Settlement.



Note: this is NOT the SEC this is Federal Prosecutors.  Prosecutors enter into settlements with criminals



All I am telling is the truth, its the Geeps and Creeps at HQ who making claims.



Have A Wonderful Night ... ButtHead



Love and Kisses



Lance


Dec 14, 2005 1:40 am

THIS IS GREAT................


California Dreaming.................

Dec 14, 2005 3:00 pm
Butkus:

No, I don't understand why so much is made of it here.


It's pretty simple, really. The firm that's spent so much time telling its sales force, the public and the competition what they "did it right" and "looked out for the client", was, in fact, rewarding their reps more to sell a select group of mutual funds.


They were sending people on trips (call them whatever you like, it's Amway meets Wall Street to have trip contests, and "sales contests" is exactly what they look like to customers) based in part on their sales in select funds, again, based on the firm and rep being paid more to tell these funds over others. The concentration of the firm's sales within the select families was massive. All while not telling the client of the conflict on interest, all while claiming the did a better job of protecting the client.


The SEC was disturbed enough by this is issue a massive fine and personally fine the senior officer of the firm. This wasn't your usual slap on the wrist.

Dec 14, 2005 5:59 pm
Butkus:

A link supporting your claim would be nice.


Have you read it?  Care to respond?


I can't wait to hear the new spin.

Dec 15, 2005 12:08 am
Butkus:

So where is the problem here?


Lance, you might substantiate the fraud charge, as Martha Stewart went to jail but Doug Hill is not.



Butkus


That's because Doug "3 Mil" Hill was allowed to pay a fine of 3 million Dollars and resign from Edward Jones as Managing General partner, or GO TO JAIL...  Your comparison is not even close.


I can post the articles for you, they have been listed on here many, many times, even though you don't read the WSJ it has been documented many times, it is a FACT................


You've been drinking way too much KOOL AID


Arrogance is no excuse for knowledge.....

Dec 15, 2005 12:11 am

Butkus


Here it is:   Thanks to csmelnix........


It's all about what's best for the client!
Edward Jones Mutual Fund Scandal OverviewFrom the mid 1990s until the present, Edward Jones has had selling agreements with upwards of 240 different mutual fund families. Seven (7) of those mutual fund families became known as Edward Jones’s “Preferred Families” of funds. The Preferred Families included American Funds, Federated Investors, Goldman Sachs Funds, Hartford, Lord Abbett, Putnam Funds and Van Kampen Investments.


The mutual funds in the Preferred Families paid extra incentives to Edward Jones in return for Edward Jones soliciting/recommending its clients to purchase these funds. The SEC determined that the incentives were worth tens of millions of dollars each year to Edward Jones, on top of the commissions and other fees Edward Jones received for selling Preferred Families funds. The incentives proved to be powerful motivators, as more than 95% of all Edward Jones mutual fund sales were made in these 7 Preferred Families.


However, this incentive program was not adequately disclosed to the clients of Edward Jones. This left clients of Edward Jones unaware that Edward Jones had a strong motivation to recommend the purchase of the Preferred Families to the exclusion of the other fund families they could recommend, regardless of the client’s best interests.



Federal and State Regulators Take ActionIn December 2004, Edward Jones settled the charges brought by the Securities and Exchange Commission (SEC, press release, Order Instituting Proceedings) and, the National Association of Securities Dealers (NASD, press release, Letter of Acceptance Waiver and Consent), which are the governing bodies of the securities industry, as well as charges brought by the New York Stock Exchange. The charges involved Edward Jones’s failure to disclose to investors the extra incentives it received for recommending certain mutual funds. To settle the charges, Edward Jones paid a total of $75 million dollars.

On the date that this settlement was released, the California Attorney General (press release, Complaint) filed an additional suit against Edward Jones. The California Attorney General stated that he did not believe that the $75 million settlement was sufficient. The California Attorney General also stated that Edward Jones could have accepted up to $300 million in improper payments.


Edward Jones has also entered into a settlement with the securities regulators in its home state of Missouri. In the settlement Edward Jones stipulated and agreed to findings that it failed to adequately disclose the revenue sharing arrangements to Missouri residents and agreed to pay fines totaling $1.5 million. (press release)



What You Can Do

If you have lost money while invested with Edward Jones, please contact us today. We can determine whether Edward Jones violated your rights.


We help people who have suffered losses as the result of investment fraud such as this and will work on your behalf to recover losses that you have sustained.

Dec 15, 2005 12:20 am

Butkus


New Revenue sharing at Edward Jones:


GP to new IR "Bend over" it's time you learn about Revenue Sharing........you get the SHAFT, GP'S get the GOLD.................OH, YEA...............


Isn't that easy..................

Dec 17, 2005 9:23 am

I didn't see anything here suggesting Doug Hill faced criminal charges.