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BB&T Ordered to Pay More than $5.5 Million Over Alleged Overcharges at Acquired Firm

By Alex Padalka March 7, 2019

BB&T Securities is on the hook for more than $5.5 million over alleged fee disclosure infractions at a firm it acquired, according to the SEC.

Valley Forge Asset Management allegedly misled investors to convince them to use its in-house brokerage offerings with promises of a high level of service at a low cost, according to a press release from the regulator.

But Valley Forge allegedly didn’t provide any service above what clients received using another brokerage that charged far smaller commissions, the SEC says. And Valley Forge’s commissions were allegedly around 4.5 times higher on average than other brokerage options available to its clients, according to the press release.

Valley Forge also allegedly told clients they were getting a 70% discount off its supposed retail rates, the SEC says.

The SEC found BB&T Securities as the successor in interest to Valley Forge’s violations, according to the press release. BB&T had already ended Valley Forge’s existing directed brokerage program through changes to its cost structure and disclosures, according to the regulator. BB&T nonetheless agreed to a cease-and-desist order, a censure and a $500,000 penalty, the SEC says.


The company also agreed to pay $4,712,366 in disgorgement and prejudgment interest of $497,387, according to the press release.

BB&T agreed to the sanctions without admitting or denying the SEC’s findings, the regulator says.