FINRA Issues $125K Fine to Edward Jones for Failing to Report 2.7M Fractional Share Trades

Edward D. Jones & Co., L.P. agreed to a $125,000 fine and censure to settle FINRA charges that the firm failed to report approximately 2.7 million fractional share liquidations to FINRA trade reporting facilities from January 2018 through April 2021, according to a letter of acceptance, waiver, and consent.

The firm, a self-clearing retail broker-dealer headquartered in St. Louis with approximately 25,000 registered representatives and 15,000 branch offices, was also required to pay regulatory transaction fees owed on the unreported trades.

FINRA Rules 6380A and 6622 require member firms to report principal-capacity trades in national market system stocks and over-the-counter equity securities to the FINRA/Nasdaq Trade Reporting Facility and the Over-the-Counter Reporting Facility, respectively. Fractional share transactions are subject to those requirements. Violations of the trade reporting rules also constitute violations of FINRA Rule 2010, which requires members to observe high standards of commercial honor.

When customers sell positions containing fractional shares, Edward Jones routes the whole-share portion of the order to the market in an agency capacity and executes the fractional portion as principal. The majority of the unreported trades arose from customers liquidating fractional positions accumulated through the firm’s dividend-reinvestment and dollar-cost averaging programs.

Edward Jones began reporting fractional share transactions in November 2019, more than 21 months into the violation period. However, the firm continued through April 2021 to omit fractional share transactions generated when it liquidated fractional positions in connection with customer account transfers through the Automated Customer Account Transfer Service, which does not support fractional share transfers.

On the supervisory side, FINRA found that Edward Jones lacked any written supervisory procedures addressing complete and accurate reporting of fractional share transactions until September 2020 – more than two and a half years after the violations began. Even after implementing supervisory reviews that month, the firm’s system remained deficient because it did not cover fractional share transactions arising from ACATS transfers.

FINRA cited violations of Rules 3110(a) and 3110(b), which require member firms to establish, maintain, and enforce a supervisory system and written procedures reasonably designed to achieve compliance with applicable securities laws and FINRA rules.

The AWC was signed by Keir Gumbs, identified as a principal of the firm, on June 10, 2026. Edward Jones neither admitted nor denied the findings.

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