During the investigation period, July 1, 2009 and February 22, 2018, Kestra deprived eligible retirement accounts and charitable organizations that qualified but did not receive, the applicable mutual fund sales charge waiver or appropriate share class.  Customers were overcharged approximately $1.6 million.  The investigation found that since July 2009, approximately 3,250 eligible customers accounts purchased mutual funds shares for which the Firm did not apply an available sales charge waiver.  Kestra relied on its financial advisors to determine the applicability of sales charge waivers but failed to maintain reasonable designed written policies or procedures to assist in making this determination.  The different sales charges, breakpoints, waivers and fees associated with different shares classes affect the return customers receive from mutual fund investments.   

Without admitting or denying the findings, the firm agreed to pay customers $1.9 million.  Kestra was also fined $325,000.  The firm agreed to the entry of findings that it failed to establish, maintain and enforce a supervisory system and written supervisory procedures reasonably designed to ensure that its registered representatives’ recommendations complied with applicable securities laws and regulations and FINRA rules.  Additionally, Kestra has provided FINRA with a detailed plan to remediate eligible customers.