Wachovia Securities has been fined $2 million and ordered to pay restitution to more than 1,300 customers for charging excessive fees in its fee-based brokerage accounts, regulators said Thursday.
NASD, the securities industry's self-regulatory organization, said the Richmond, Va.-based unit of Wachovia Corp. charged inappropriate fees to some customers for maintaining accounts, even though they did not conduct any trades. It also said several hundred mutual fund customers were charged duplicative account fees.
NASD said Wachovia Securities failed to establish and maintain an adequate supervisory system, including written procedures, designed to monitor its Pilot Plus fee-based brokerage accounts.
The violations took place from 2001 to 2004, NASD said.
Wachovia Securities spokesman Tony Mattera said the opening of Pilot Plus accounts had been suspended.
"The suitability of our products, services and advice for clients has always been and remains a high priority for Wachovia Securities," he said.
Charlotte, N.C.-based Wachovia announced plans last month to buy A.G. Edwards Inc. for $6.8 billion and merge the St. Louis-based brokerage with Wachovia Securities.