Ending a more than two-year dispute, Scottrade has agreed to pay a $250,000 fine to the Massachusetts Securities Division related to supervision and training regarding sales contests.
Commonwealth Secretary William Galvin, the state’s top securities regulator, charged the broker-dealer on Feb. 15, 2018, with violating the Massachusetts Uniform Securities Act and “dishonest and unethical activity and failure to supervise” for conducting sales contests.
Galvin said in announcing the complaint against Scottrade that the sales contests violated Labor’s impartial conduct standards, which took effect on June 9, 2017.
If the Labor Department “will not enforce its own laws and rules, then the states must do what they can to protect retirees from firms who believe they can play with peoples’ life savings by conducting sophomoric contests,” Galvin stated at the time.
TD Ameritrade, however, said in statement to ThinkAdvisor Thursday that the order “relates solely to supervision issues, and specifically to training; the Order states no violation whatsoever regarding the impartial conduct standards.”
The “single violation” stated in the order, TD maintained, “is a failure reasonably to supervise under Massachusetts law because all Scottrade investment consultants had not received training related to a policy Scottrade adopted governing sales contests.”
The order , TD continued, “does not find or charge any violation of the impartial conduct standards and there is no suggestion that Scottrade did not, in fact, act at all times in the best interests of its clients.”