The Securities and Exchange Commission said SunTrust Banks Inc. has agreed to settle charges that the lender's investment services subsidiary collected some $1.1 million in avoidable fees by pushing the costlier option of certain mutual funds on clients.
The SEC alleged that the Atlanta-based bank failed to act in its clients' best interests by steering them toward the mutual funds with extra costs. The SEC said over 4,500 accounts were affected.
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"SunTrust made self-serving investment recommendations to the detriment of everyday investors who rely on mutual funds to secure their financial futures," said Aaron W. Lipson, associate regional director for enforcement in the SEC's Atlanta office, on Thursday.
SunTrust didn't admit to or deny the findings of the SEC investigation. The bank agreed to pay a penalty of over $1.1 million and has started refunding the fees to clients.
The SEC launched its probe after a compliance review in 2015. The bank agreed to be censured and paid disgorgement plus interest on any leftover amount on the avoidable fees.
"Although we believe that our disclosures were in accordance with industry standards, we cooperated fully with the SEC and are pleased to have settled this matter," said Sue Mallino, a SunTrust spokeswoman.
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(END) Dow Jones Newswires
September 14, 2017 14:20 ET (18:20 GMT)