PNC Investments in Trouble for Mutual Fund Sales Violations

Last week, PNC Investments was fined $225,000 for overcharging retirement clients in connection with mutual fund purchases. Allegedly, since at least July 2009, PNC Investments failed to apply waivers for investors in some Class A share mutual funds, even though a waiver of the front-end sales charges was available to eligible customers and disclosed in prospectuses. This was according to a disciplinary action document signed on April 11th by the Financial Industry Regulatory Authority (FINRA). The document claimed that PNC sold the Class A shares with a front-end load or Class B shares with a back-end load and higher ongoing fees and expenses, causing such customers to pay higher fees than they were actually required to pay. This resulted in PNC Investments overcharging 121 customer accounts by approximately $191,740 for mutual fund purchases, estimated to total $224,750 including interest. PNC was also accused of having supervisory lapses, according to FINRA, for failing to maintain adequate written policies or procedures to help financial advisors determine when to apply sales waivers.

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