As its lawsuit against Wells Fargo chugs along, Franklin D. Azar & Associates is taking the helm of a class action against another financial industry giant.
On July 25, a federal judge signed off on an order to make FDAzar lead counsel in a class action against Edward Jones. Filed March 30 with co-lead counsel Garner & Associates of Willows, California, the lawsuit alleges that Edward Jones bilked customers by moving their assets to fee-based accounts to collect more revenue.
The move signals that the Denver firm is becoming more active in large-scale financial industry litigation. The firm is also leading plaintiffs in a separate class action against Wells Fargo over the bank’s handling of guaranteed asset protection, or GAP, insurance it provided customers.
According to the complaint against Edward Jones, the financial advisor breached its fiduciary duty to customers by using a “reverse churning” scheme to collect fees on their accounts that otherwise had little trading activity. Reverse churning is the practice of financial advisors placing clients’ assets in fee-based accounts for the sole purpose of collecting the fees. The plaintiffs say Edward Jones gave customers insufficient notice when it shifted their assets from commission-based accounts to fee-based accounts, which caused them to pay more without getting more in terms of services.