Some small-time investors in Massachusetts will be getting money back, as part of a multi-state settlement over excess brokerage fees.
According to Massachusetts Secretary of State Bill Galvin, whose office regulates securities in the state, any transaction fee over 5% is considered excessive. He said some were charging well over that to people investing small amounts of money.
"These commissions range from $25 to $95," Galvin said. "They weren't reasonable at all given the size of it (the investments), and often times the small person gets left behind, the small investor doesn't get the attention,"
He said a lot of these transactions were done electronically, with little work to be done for the brokerage houses.
“This is just adding it on, taking money they could get because they could, not because they earned it,”he said.
As for the settlement, which was announced Monday, some 8,000 accounts in Massachusetts will see a total rebate of about $300,000.
Nationally, the companies will pay up to $9.8 million dollars in fines.
Galvin said the firms charged nearly $20 million in "unreasonably high" commissions over a five-year period nationally.
The firms involved in the settlement include: Edward Jones, LPL Financial, RBC, Stifel, and TD Ameritrade. Galvin said similar settlements are also being pursued with others.
Besides Massachusetts, the other states involved were Alabama, Iowa, Missouri, Montana, Texas and Washington. Some 21 other states are expected to join the action.
