Robert W Pearce's  Instablog

Robert W Pearce
Send Message
Mr. Pearce has tried, arbitrated and mediated numerous disputes involving complex securities, commodities, administrative, contract, commercial, business tort and employment law issues for over 35 years. He has represented hundreds of clients in Federal and state courts (trial and appellate) as... More
My company:
The Law Offices of Robert Wayne Pearce, P.A.
My blog:
The Investor's Rights Law Blog
    Feb 21, 2013 11:21 AM

    Investors nationwide might be eligible for a refund of the front-end sales charge they paid when they purchased Class A shares of a mutual fund from their respective securities firms. An industry-wide survey taken showed that investors did not receive discounts in one out of every five transactions that were eligible for discounts. Front-end sales discounts are offered to customers who are making large mutual fund investments - usually between $25,000.00 and $50,000.00. The Financial Industry Regulatory Authority (FINRA) is expecting firms to make refunds to their customers where they are aware that their customers did not receive a discount to which they were entitled. In addition, FINRA is expecting firms to make refunds when clients come forward and show that they did not receive all applicable discounts.

    Mutual funds typically offer more than one "class" of shares to investors. Each class represents the same interest in the mutual fund, but the sales charges, fees, and expenses will vary. For example, Class A shares require investors to pay a front-end sales charge or "load" that is deducted from the initial investment amount - a 5% front-end sales load at a cost of $1,000 will generate a $50 sales load with $950 remaining invested in the mutual fund. Investors may qualify for a breakpoint discounts in a number of ways: 1) the amount invested exceeds a breakpoint threshold; 2) a letter of intent is written stating that the customer will invest an amount greater than a break-point threshold within a specified time established by the fund; and 3) having rights of accumulation, which allow customers to combine future purchases with earlier ones to exceed a break-point threshold. Each mutual fund family sets its own breakpoint discounts and sets the rules regarding which accounts will count towards breakpoint discounts.

    Securities firms must make a refund if an investor has a valid claim that he or she was overcharged. In fact, many firms have already begun to refund excessive front-end sales load charges to their customers. FINRA is directing more than 450 securities firms to notify customers who purchased Class A mutual fund shares since 1999 that they may be due discounts resulting from their respective firms' failure to provide breakpoint discounts. FINRA is also requiring nearly 175 of those firms with poor records of providing breakpoint discounts to complete a comprehensive review of transactions since 2001 for possible missed discount opportunities.

    Do you believe you are entitled to breakpoint discounts, but have not yet received a refund? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

    The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,, post a comment, call (800) 732-2889, or email Mr. Pearce at for answers to any of your questions about this blog post and/or any related matter.

Back To Robert W Pearce's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • Buyandhold 2012
    , contributor
    Comments (5245) | Send Message
    Mr. Pierce, I find your instablogs to be extremely informative. Many investors are not aware of many of the rules and regulations regarding financial investments. Those who are not aware of the law may easily be victimized. A close friend of mine in Jupiter, Florida invested in a variable annuity at age 85. It was pushed on her by her bank. Her son told the bank that if they did not immediately place all of the money back into her account that he would not only sue but contact the local media. The money was returned immediately. The elderly are easily victimized.
    22 Feb 2013, 04:24 PM Reply Like
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.