Hey where's that weasel that claimed these investigations by the SEC were going to be dropped .... yeah right   

Edward Jones' sales contest irked regulators
Insufficient supervision to combat late fund trades also cited

"The NASD has brought a number of actions in the mutual fund area, and this action is a continuation of this focus," Katherine Malfa, vice president of enforcement at NASD, said Wednesday.

On Dec. 22, brokerage Edward Jones reached final settlements with the Securities and Exchange Commission, the NASD and the New York Stock Exchange tied to charges that it failed to adequately disclose revenue-sharing payments it received from mutual fund families and 529 savings plans, also known as college savings plans, it recommended to customers.

The NASD and the NYSE, which are self-regulatory organizations, also charged the firm with violating their rules by lacking adequate supervisory practices to combat late trading, Malfa said in a telephone interview.

Both organizations also charged Edward Jones with failure to retain emails, she said. In addition, the NASD brought charges for conducting the illegal sales contest and for violating one of its rules that prohibits firms from favoring the sale of specific funds in return for brokerage commissions, Malfa said.

Edward Jones agreed to the settlement without admitting or denying guilt. In a regulatory filing on Monday, the St. Louis, Mo.-based firm also said Douglas Hill, managing general partner, had agreed to retire voluntarily at the end of 2005.

Late trading, which is illegal, occurs when people are allowed to buy mutual fund shares at the current day's net asset value after the 4 p.m. EST close of trading. Federal securities laws require mutual fund transactions received after 4 p.m. to be given the next day's NAV. In late trading, traders may seek to profit from market events occurring after 4 p.m. that aren't reflected in that day's price.

Edward Jones said in the filing that prior to Nov. 30, 2003, between 4:01 p.m. and 4:45 p.m., the firm allowed investment representatives to call the Service Division at its headquarters to request that a trade entered after 4 p.m. be "released" and given the same day's NAV. Between May and November 2003, the firm identified about 8,700 instances where an order was entered, changed or cancelled after 4 p.m. and given that day's NAV.

Typically, the only question the service representative posed to the investment rep was whether the order was received prior to 4 p.m. Once the rep answered yes, the trade was released at that day's NAV, the filing said.

The NASD found that in those instances, the firm didn't have policies or procedures in place to verify that customers actually placed those orders before the 4 p.m. close, Malfa said.

In addition to "released" trades, the firm also permitted trade corrections, the filing said. If a trade entered into the firm's computer system before 4 p.m. had administrative errors, an investment rep was allowed to correct it after the fact, changing among other things the quantity and fund name of the trade without prior supervisory approval. The corrections, however, were listed on reports to supervisors, the filing said.

The NASD said its charge concerning the unlawful sales contest relates to a contest held in Fall 2002. Winning brokers could pick from 35 vacation spots such as Singapore, St. Martin, Davos, Biarritz and Tortola. The contests, held every six months, rewarded winners with airfare and five-star accommodations, as well as with activities such as skiing and golfing.

In October 2002, Edward Jones altered the rules, only crediting sales of fund shares from its preferred list. That violated NASD rules which prohibit product-specific sales contests that credit the sale of some, but not all, fund sales. According to an NASD release issued last week, some brokers complained that "doing the right thing" for clients by recommending non-preferred funds and variable annuities hurt their chance to earn a sales contest trip.

Edward Jones spokeswoman Katie Schonaerts said the firm had no comment beyond the filing.

[quote=LA,P-ALL]

Illuminat / Zacko / other former ex-Jones IR's,

You cannot possibly imagine the amount of brainwashing going on within EDJ.  The average IR I know is incensed at the gall of the WSJ and Post Dispatch printing such nonsense.  "It is legal, it will pass, it's all good, not to worry".  Been here eight years.  What gives?  Are they brainwashed or playing it close to the vest?

[/quote]

'Playing it close to the vest' would suggest that "they have other cards to play yet".  I would suspect that not only are there no other useful cards to play, but that they (Jones) are not even sure which game they are playing.

The S.O.P., by default, will include running the propoganda machine. The "brainwashing" TODAY is just music to calm the masses:

The music was cheerful and gay. The selections were mostly ragtime and gave the impression to the passengers on deck that all was under control, there was no need to panic. Many of the survivors expressed their gratitude to the Titanic band for helping to maintain an air of decorum during the scramble for the lifeboats. Others have criticized the band for playing. Some felt that having the band on deck gave people a false impression that things weren't that bad and it caused many to take the situation lightly, thus preventing many from entering the life boats. This argument is left to conjecture, but what is known is that the band's music did help to soothe the passengers and most likely prevented panic as the last of the boats were leaving.

At 2:00 A.M. the last boat, Collapsible D, left the ship. It was now 2:05 A.M. more than 1,500 people were still aboard. The Titanic sank lower and lower at the bow, and stern began to rise out of the water. There was little time now. The band continued to play. The deck became so steep that bandmaster Hartley released the musicians from duty. Alone, he began the first notes of a simple hymn. One by one the bandsmen, choosing not to leave joined in. It was the last song the band would play and the last song survivors heard before the boat broke into two pieces. Minutes later the entire band was washed away by a sudden wave as the Titanic made it's last plunge.

Edward Jones IR's are in shock

I heard from an old IR friend in California, he said their phones are ringing off the hook, clients wanting to know when and how they can get their money back on their lousy Mutual Funds The calls are non stop !

But the brainwashing is really going on to the extreme, I talked to another IR that told me " here is no way California is going to cost Jones a penny " I asked him if the same GP that told him the SEC would never fine Jones for doing the right thing, oh, he's the one that got fined 3 Million and had to resign........................ 

It is really amazing how intelligent people can be duped over and over............That Kool Aid must be getting stronger than ever

Being an IR at Jones, for the moment, it is indeed a very strange time. For the record, I have been with Jones for 8 years and I am finishing up the year at the 300K level. When I started with Jones, I came out swinging. My numbers were way above the standard and I was praised by my peers (cherry flavored). It was an honor to be asked to mentor new IRs (grape) or to lead the call out sessions (lemonade), or to become the growth leader (Fruit Punch) and to become the New Hire Specialist (Berry). I did all of this for free and my business suffered.



Today, there are two distinctive camps. The “I cant believe they can do this to us” camp and the other “I can’t believe they can do this camp”. They being, the GPs and the other being the Press.



Today, my Kool Aid cup is empty and as I look around, I have nothing to show for it. My book is not mine and I am constantly monitering the news before work in order to see what traps lie awaiting me prior to arriving at work.



I am not getting many calls…yet. The ones who are calling are feeling bad for me for working for such scoundrels. Greed is a terrible thing. It tends to lead to unethical behavior.



So if you are in the “Jones is the best place to be camp”, please hand me a new cup of Kool Aid. I may not drink it, but at this point, we are picking up camp and closing this chapter.



You have three months to change my mind.



“Honey, get the kids clothes on, we’re getting ready to leave.”

Thought I would take a look at the Edward Jones website to see if there was any mention of their current travails.  No mention, but it was enlightening to read.  For example:

1.  Under the "How Others See Us" tab there is copious recitation of media citations about the nice things said about Jones.  No mention about what the SEC, NYSE, NASD, California AG or the thousands of mislead clients had to say.

2.  Under "Comprehensive Resources" the following is stated.  "We offer the broadest selection of high-quality stocks, bonds, mutual funds, CDs, insurance/annuities..."  The word offer should be changed to "we can get you if you really, really demand".

3.  Under "A Commitment to Quality" I learned that in 1987 Edward Jones established an Investment Policy Advisory Committee made up of 15 "experts".  The Co-Chairman of this Committee is Anthony Kreisel, Former Managing Director of Putnam Funds. Enough said!!!!

4.  Finally, there is a tab titled "In The News".  There was not a single mention of any problems or potential problems.  I guess the webmaster doesn't subscribe to the Wall Stree Journal, Forbes, Investors Business Daily, the St. Louis Post Dispatch or any of the other financial publications that have been exposing Jones.  I believe this omission should be construed as failure to provide full and fair disclosure.

Bottom Line.  Edward Jones has learned nothing from this.  The fine was too inconsequential to get their attention.  They are viewing this as a short-term public relations problem that will go away, allowing the GPs to return to some new scheme for fleecing investors. 

For the clones and drones that are too young to remember the past, allow me to recite for you the hit parade of investment failures that Jones swept under the rug in the early 80s:

1.  Petro Lewis

2.  Gambles Skogmo

3.  NRM

4.  EMC

5.  Famland

6. University SPDA

7. Winchester Oil

8.  McNeil Real Estate

9.  Angeles Real Estate

These were very real, catastrophic losses to conservative clients that merely represented a speed bump to the GPs.  Let's hope that the California AG and the pending class action suits bring a real aspect of justice to Jones.

The California AG will have a very small effect.  He keeps using national numbers to tell a local audience about a CA settlement.  Let's assume that his 300 million figure is right.  Let's even go so far as to assume that 5 percent of that were in the state of California.  That would only be 15 million tops, and quite frankly it is doubtful they will get that much.  (The 5 percent figure is probably exaggerated as I think Jones is not as big a presence in California.)

So the most damages they could claim would be 15 million and in settlement talks, that will probably dip to 5 million. 

Sure, other states could follow suit, but I seriously doubt they will once they see how little the money will be for CA.

not1,

review the following and then comment

http://www.hoovers.com/jones-financial-companies/--ID__40868 ,ipage__3164579--/free-co-secoutline.xhtml

Phuck 'em.  Who cares what happens to Edward Jones?

"I just finished my eighth year at Jones at 300k gross." "My business suffers because I do everything." You're an underachiever. Perhaps if you stayed off internet chat rooms and worked the Tuesday Night Promo's you wouldn't be so bitter about your low production.

You people on this chat room are obviously frustrated at not making it at Jones. They aren't for everybody and the proof is in this forum.

I drink the Kool-Aid every day. It tastes great and I will be taking a large amount of it with me on the diversification trip to the exotic island Turks & Caicos paid for by Edward Jones.

Aloha, baby!!!

Anybody heard when EJ clients are going to be able to switch funds at NAV?

I know some EDJ clients that want to transfer to me, but maybe they should hold off and do the switch before transferring over

[quote=xej1984]

not1,

review the following and then comment

http://www.hoovers.com/jones-financial-companies/--ID__40868 ,ipage__3164579--/free-co-secoutline.xhtml

[/quote]

"He (the Director of Mutual Funds Marketing) also represented to the IRs that Edward Jones directly passes the revenue sharing income along to the "IRs who did the work to get the money in the first place."

It sounds like revenue sharing income was being passed down to the worker bees.  I don't think so!  In III.8, the breakdown shows revenue sharing only going to partners.

[quote=megdawg]

They aren't for everybody and the proof is in this forum.

[/quote]

megdawg,

You are right.  EDJ wasn't for me, for all of the reasons outlined in the SEC ruling.

Learn to read Elliemae. If you worked at Jones you will know that revenue sharing is credited to the P&L. Seperate your emotions and get it straight. You’re sounding like another underachieving former IR that didn’t make it.  

Elliemae. That’s a cop out. You failed, plain and simple.

[quote=megdawg]Elliemae. That's a cop out. You failed, plain and simple.[/quote]

The hubris of the ignorant.

Congratulations, mega!

No Starka. The facts from the one who knows.

[quote=megdawg]No Starka. The facts from the one who knows.[/quote]

Your firm is the laughingstock of the industry meg and so, apparently, are you.

Starka. Your reply is typical from someone that is uninformed and knows it. How sad.

[quote=megdawg]Elliemae. That's a cop out. You failed, plain and simple.[/quote]

Hey meg,

Maybe you know the answer to my previous question:

Anybody heard when EJ clients are going to be able to switch funds at NAV?

I know some EDJ clients that want to transfer to me, but maybe they should hold off and do the switch before transferring over

Can they do the switch now, so I can go ahead and get those accounts moved 

[quote=megdawg]

Starka. Your reply is typical from someone that is uninformed and knows it. How sad.

Meg, save your tears for someone who cares.