Five brokerage firms agreed in June 2025 to a coordinated settlement over excessive brokerage commissions, refunding about $19 million to customers who were overcharged on roughly 1.12 million small-dollar stock trades over a five-year period.1North American Securities Administrators Association (NASAA) Edward Jones, LPL Financial, RBC Capital Markets, Stifel, and TD Ameritrade will pay full restitution plus 6% annual interest, along with fines totaling up to $9.345 million. Restitution is being distributed automatically, either as a credit to current accounts or by check to former customers and holders of retirement accounts.
Who Was Overcharged
The problem was the firms’ minimum commission fees. When a customer bought or sold a small amount of stock, the flat minimum could push the effective commission well past 5% of the trade’s value, the threshold FINRA Rule 2121 treats as potentially unfair. RBC’s $95 minimum, for example, produced a 19% commission on a $500 purchase. Stifel’s minimum was $40. Other firms in the group ran minimums from $25 to $95. If you placed a small equity trade at one of these firms during the relevant window and paid more than 5% of the principal amount in commission, you’re in the covered group.
The Five Firms and What Each Owes
Edward Jones was by far the largest offender, with roughly $11.3 million in overcharges across about 781,240 transactions between May 2020 and April 2025.
RBC Capital Markets charged excessive commissions on about 89,900 transactions, totaling roughly $3.4 million. LPL Financial overcharged on more than 127,000 trades for about $2.49 million, using a $30 minimum that became disproportionate on trades of $2,500 or less. TD Ameritrade’s excessive charges came to more than $913,000 across about 84,618 transactions between June 2018 and June 2023, before Charles Schwab acquired the firm; the settlement names TD Ameritrade as a Schwab subsidiary. Stifel’s overcharges totaled $885,480 on roughly 45,352 trades.
How Restitution Is Being Paid
Each firm must return the amount charged above 5% of the principal trade value, plus 6% annual interest running from the date of each transaction. Current customers receive account credits; former customers and retirement account holders receive checks. There is a $10 minimum: if your individual overcharge came out below that, you won’t get a separate payment. You don’t need to file a claim. The firms are required to identify affected customers from their own records and distribute the money, and they must certify to state regulators that they’ve done so.
Why 5% Is the Line
FINRA Rule 2121 requires broker-dealers to charge commissions that are “fair and reasonable” given all the circumstances of a trade, and treats markups above 5% as potentially unreasonable. The rule expects firms to weigh the type of security, the dollar amount of the transaction, and the overall pattern of markups. Regulators found that the five firms’ minimum-commission schedules applied a flat fee without adjusting for trade size, and that their surveillance systems often excluded minimum-commission trades from review entirely, so the overcharges went undetected internally for years.2FINRA Rule 2121 Going forward, each firm must revise its policies so equity commissions do not exceed 5% of principal unless there is a documented exception. None of the firms admitted or denied the findings.
Which States Are Participating
A seven-state working group led the investigation: Massachusetts, Alabama, Iowa, Missouri, Montana, Texas, and Washington. Massachusetts Secretary of the Commonwealth William Galvin was a leading figure in the effort. More than 20 additional states announced they would join the settlement, including California, Colorado, Georgia, Illinois, Indiana, North Carolina, Ohio, Pennsylvania, and Wisconsin. Customers in any participating state are eligible for restitution. Individual states issued their own consent orders with terms tailored to their residents; Massachusetts, for instance, found 6,603 affected Edward Jones transactions in that state and required at least $114,782 in restitution to Massachusetts customers, plus a $100,000 fine and $25,000 in investigative costs.
More Firms May Follow
NASAA said its investigation is ongoing with respect to additional, unnamed firms, so the June 2025 settlements may not be the last actions to come out of this inquiry. If you traded small dollar amounts of stock at another broker-dealer during the same window, watch for further announcements, but the current settlement only covers the five firms named above.