WASHINGTON, March 5 (Xinhua) -- U.S. Securities and Exchange Commission (SEC) announced on Tuesday that BB&T Securities agreed to return millions of dollars to retail investors and pay a penalty to settle charges that a firm it owned misled its clients about the cost of advisory services.
The SEC's investigation found that a company named Valley Forge Asset Management had used misleading statements and insufficient disclosures to charge its customers with high commissions.
"Valley Forge charged commissions averaging roughly 4.5 times more than what clients would have paid using other brokerage options," said SEC. "And the firm obscured the price difference by claiming that it was giving clients a 70 percent discount off of its supposed retail commission rate."
However, SEC found that Valley Forge did not provide any alleged additional services compared to other brokerages, despite it promised to provide a high level service at a low cost. Meanwhile, the SEC also found that BB&T Securities "as the successor in interest to Valley Forge."
As a wholly owned nonbank subsidiary of the top-tier banking giant BB&T Corporation, BB&T Securities agreed to return over 5 million dollars to retail investors and pay a 500,000 dollars penalty without admitting or denying the findings, according to SEC.
"The SEC's examination and enforcement programs will continue to identify these types of violations and return money to harmed retail investors as quickly as possible," said Kelly L. Gibson, associate director of enforcement in the SEC's Philadelphia Regional Office.
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