In re Edward D. Jones & Co.

 
 
UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 100704 / August 14, 2024 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6654 / August 14, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3- 22001 
 
 
In the Matter of 
 
Edward D. Jones & Co., L.P.,  
 
Respondent. 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934 AND SECTIONS 203(e) AND 203(k) OF 
THE INVESTMENT ADVISERS ACT OF 
1940, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
 
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 
the public interest that public administrative and cease-and-desist proceedings be, and hereby 
are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 
(“Advisers Act”) against Edward D. Jones & Co., L.P. (“Edward Jones” or “Respondent”). 
 
II. 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 
facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 
Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Sections 203(e) 
and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial 
Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 

 
 
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III. 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that 
 
Summary 
1. The federal securities laws impose recordkeeping requirements on broker-dealers 
and registered investment advisers to ensure that they responsibly discharge their crucial role in 
our markets.  The Commission has long said that compliance with these requirements is essential 
to investor protection and the Commission’s efforts to further its mandate of protecting investors, 
maintaining fair, orderly, and efficient markets, and facilitating capital formation. 
2. These proceedings arise out of the widespread and longstanding failure of Edward 
Jones personnel throughout the firm, including at senior levels, to adhere to certain of these 
essential requirements and the firm’s own policies.  Using their personal devices, these personnel 
communicated both internally and externally by text messages and/or other unapproved written 
communications platforms (“off-channel communications”). 
3. From at least June 2019 (the “Relevant Period”), Edward Jones personnel sent 
and received off-channel communications that were records required to be maintained under 
Exchange Act Rule 17a-4(b)(4) and/or Advisers Act Rule 204-2(a)(7).  Respondent did not 
maintain or preserve the substantial majority of these written communications.  Respondent’s 
failures were firm-wide and involved personnel at various levels of authority throughout the 
organization.  As a result, Edward Jones violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 
4. Edward Jones’s widespread failure to implement a system reasonably expected to 
determine whether personnel were following its policies and procedures that prohibit off-channel 
communications led to its failure to reasonably supervise its personnel within the meaning of 
Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(6) of the Advisers Act.  
5. During the Relevant Period, Edward Jones received and responded to 
Commission subpoenas for documents and/or records requests in a number of Commission 
investigations.  As a result, Edward Jones’s recordkeeping failures likely impacted the 
Commission’s ability to carry out its regulatory functions and investigate violations of the 
federal securities laws across these investigations.   
6. Commission staff found Edward Jones’s misconduct after commencing a 
risk-based initiative to investigate the use of off-channel and unpreserved communications at 
investment advisers.  Edward Jones has initiated a review of its recordkeeping failures and begun 
a program of remediation.  As set forth in the Undertakings below, Edward Jones will retain a 
compliance consultant to review and assess Edward Jones’s remedial steps relating to its 
 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 
 
3 
recordkeeping practices, policies and procedures, related supervisory practices, and employment 
actions. 
Respondent 
7. Edward D. Jones & Co., L.P. is a Missouri limited partnership with its principal 
office in Saint Louis, Missouri, and has been registered with the Commission as a broker-dealer 
since 1941 and as an investment adviser since 1963.   
Recordkeeping Requirements under the Exchange and Advisers Acts 
8. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 
authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 
advisers to make and keep for prescribed periods, and furnish copies of, such records as 
necessary or appropriate in the public interest, for the protection of investors or, with respect to 
the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act. 
9. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 
under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 
time that the records created in accordance with Commission rules, and certain other records 
produced by broker-dealers or investment advisers, must be maintained and produced promptly 
to Commission representatives.   
10. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 
17a-4(b)(4), require that broker-dealers preserve in an easily accessible place originals of all 
communications received and copies of all communications sent relating to the broker-dealer’s 
business as such.  These rules impose minimum recordkeeping requirements that are based on 
standards a prudent broker-dealer should follow in the normal course of business.  
11. The Commission previously has stated that these and other recordkeeping 
requirements “are an integral part of the investor protection function of the Commission, and 
other securities regulators, in that the preserved records are the primary means of monitoring 
compliance with applicable securities laws, including antifraud provisions and financial 
responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 
Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 
with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 
12. The rules adopted under Advisers Act Section 204, including Advisers Act Rule 
204-2(a)(7), require that investment advisers preserve in an easily accessible place originals of all 
communications received and copies of all written communications sent relating to, among other 
things: (a) any recommendation made or proposed to be made and any advice given or proposed to 
be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the placing or 
execution of any order to purchase or sell any security; or (d) predecessor performance and the 
performance or rate of return of any or all managed accounts, portfolios, or securities 
recommendations. 

 
 
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Edward Jones’s Policies and Procedures 
13. Edward Jones maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with 
the relevant recordkeeping provisions.  For example, since 2015, Edward Jones offered a 
proprietary on-channel texting platform for external communications between financial advisors 
or other branch office employees and clients or customers.  Despite the availability of this 
platform, during the Relevant Period, personnel sent and received business communications on 
unapproved communications platforms. 
14. Edward Jones personnel were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and that they 
should not use personal email or unapproved chat or text messaging applications for business 
purposes.   
15. Messages sent through Edward Jones’s approved communications methods were 
monitored, subject to review, and, when appropriate, archived.  Messages sent through 
unapproved communications methods, such as unapproved applications on personal devices, 
were not monitored, subject to review, or archived. 
16. Edward Jones conducted trainings for its personnel, which were designed to address 
the firm’s supervision of its personnel and adherence to Edward Jones’s books and recordkeeping 
requirements.  The policies and related trainings notified personnel that electronic communications 
on approved platforms were subject to surveillance by Edward Jones.  Edward Jones also required 
from its personnel annual attestations of compliance with its policies and procedures regarding 
electronic communications.  
17. Edward Jones, however, failed to implement a system of follow-up and review 
reasonably expected to determine whether personnel were following its policies.  While 
permitting its personnel to use approved communications methods, including on personal 
phones, for business communications, Edward Jones failed to implement sufficient monitoring to 
ensure that its recordkeeping and communications policies were being followed.   
Edward Jones’s Recordkeeping Failures Across Its Brokerage and Investment Advisory 
Businesses 
18. In October 2022, the Commission staff commenced a risk-based initiative to 
investigate whether investment advisers were properly maintaining communications that they 
were required to preserve as records under the Advisers Act.  Edward Jones cooperated with the 
investigation by proactively gathering and reviewing communications from the personal devices 
of certain personnel and responding to the staff’s requests for additional information.  Edward 
Jones also produced, at the request of the Commission staff, off-channel communications of a 
subset of these personnel relating to Edward Jones’s investment advisory and brokerage 
businesses.  These personnel included financial advisors and team leaders, each of whom is a 
supervised person of Edward Jones in its capacity both as an investment adviser and as a broker-
dealer. 

 
 
5 
19. The Commission staff’s investigation found pervasive off-channel 
communications by Edward Jones personnel.  Nearly all Edward Jones personnel whose 
communications were reviewed in the course of the investigation had sent or received off-
channel communications that were records required to be preserved by Edward Jones under the 
Advisers Act and/or Exchange Act.  These off-channel communications were sent among 
Edward Jones colleagues as well as to and from Edward Jones clients and customers.  
20. The investigation found numerous off-channel communications that were records 
required to be preserved under the Exchange Act.  For example, an Edward Jones financial advisor 
exchanged multiple text messages on an unapproved platform with customers concerning fund 
transfers from their accounts.  As another example, an Edward Jones financial advisor and 
colleague exchanged text messages on an unapproved platform regarding executing a trade in a 
customer’s account.  
21. Off-channel communications included records required to be preserved under the 
Advisers Act because they related to an advisory recommendation made or proposed to be made 
or advice given or proposed to be given.  For example, an Edward Jones financial advisor 
exchanged text messages on an unapproved platform with a client concerning investment 
recommendations.  As another example, an Edward Jones financial advisor sent a text message on 
an unapproved platform to a client with recommendations about the client’s portfolio.   
22. Other off-channel communications were records required to be preserved under 
the Advisers Act because they related to the investment adviser’s receipt, disbursement or 
delivery of funds or securities.  For example, an Edward Jones financial advisor and colleague 
exchanged numerous text messages on an unapproved platform regarding the disbursement and 
delivery of funds to a client. 
23. The investigation found off-channel communications that were records required 
to be preserved under the Advisers Act because they related to the placing or execution of orders 
to purchase or sell securities.  For example, an Edward Jones financial advisor exchanged multiple 
text messages on an unapproved platform with clients concerning placing or executing trades in 
their accounts.    
24. In addition, the investigation also found off-channel communications that were 
records required to be preserved under the Advisers Act because they related to the performance 
or rate of return of Edward Jones client managed accounts, portfolios, or securities 
recommendations.  For example, an Edward Jones financial advisor and their client exchanged 
multiple text messages on an unapproved platform regarding portfolio performance. 
Edward Jones’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
25. During the Relevant Period, Edward Jones received and responded to 
Commission subpoenas for documents and/or records requests in Commission investigations.  
By failing to maintain and preserve required records relating to its businesses, Edward Jones 
likely deprived the Commission of these off-channel communications in various investigations. 

 
 
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Edward Jones’s Violations and Failure to Supervise 
26. As a result of the conduct described above, from at least June 2019 through the 
date of this Order, Edward Jones willfully
2
 violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder.   
27. As a result of the conduct described above, from at least June 2019 through the date 
of this Order, Edward Jones willfully violated Section 204 of the Advisers Act and Rule 
204-2(a)(7) thereunder. 
28. As a result of the conduct described above, Edward Jones failed reasonably to 
supervise its personnel, with a view to preventing or detecting certain of its supervised persons’ 
aiding and abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 
thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  
29. As a result of the conduct described above, Edward Jones failed reasonably to 
supervise its personnel, with a view to preventing or detecting certain of its supervised persons’ 
aiding and abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) 
thereunder, within the meaning of Section 203(e)(6) of the Advisers Act. 
Edward Jones’s Remedial Efforts 
30. In determining to accept the Offer, the Commission considered steps undertaken by 
Edward Jones prior to and after being approached by Commission staff, as well as cooperation 
afforded the Commission staff.  As noted in Paragraph 13, in 2015, prior to being contacted by 
Commission staff, Edward Jones introduced a proprietary on-channel texting platform that 
facilitated compliant communications between clients or customers who enrolled in the application 
and their financial advisors or other branch office employees.  This proprietary platform enabled 
Edward Jones to maintain and preserve a substantial number of external text messages its financial 
advisors or other branch office personnel sent or received over the approved platform.  
 
Undertakings 
31. Prior to this action, Edward Jones enhanced its policies and procedures, and 
increased training concerning the use of approved communications methods, including on 
 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and 
Section 203(e) of the Advisers Act “‘means no more than that the person charged with the duty 
knows what he is doing.’”  See Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting 
Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor 
“also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d 
Cir. 1965).  The decision in The Robare Group, Ltd. v. SEC, which construed the term 
“willfully” for purposes of a differently structured statutory provision, does not alter that 
standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish 
that a person has “willfully omit[ted]” material information from a required disclosure in 
violation of Section 207 of the Advisers Act). 

 
 
7 
personal devices, and began implementing changes to the technology available to employees.  In 
addition, Edward Jones has undertaken to: 
32. Compliance Consultant. 
a.  Edward Jones shall retain, within thirty (30) days of the entry of this Order, the 
services of a compliance consultant (“Compliance Consultant”) that is not unacceptable 
to the Commission staff.  Prior to the entry of this Order, Edward Jones retained the 
services of a consultant to address the issues in this Order.  The Compliance Consultant 
may be the same consultant previously engaged by Edward Jones.  The Compliance 
Consultant’s compensation and expenses shall be borne exclusively by Edward Jones. 
 
b.  Edward Jones will oversee the work of the Compliance Consultant. 
 
c.  Edward Jones shall provide to the Commission staff, within sixty (60) days of 
the entry of this Order, a copy of the engagement letter detailing the Compliance 
Consultant’s responsibilities, which shall include a comprehensive compliance review as 
described below.  Edward Jones shall require that, within ninety (90) days of the date of 
the engagement letter, the Compliance Consultant conduct: 
 
i.  A comprehensive review of Edward Jones’s supervisory, compliance, 
and other policies and procedures designed to ensure that Edward Jones’s 
electronic communications, including those found on personal electronic devices, 
including without limitation, cellular phones (“Personal Devices”), are preserved 
in accordance with the requirements of the federal securities laws. 
 
ii.  A comprehensive review of training conducted by Edward Jones to 
ensure personnel are complying with the requirements regarding the preservation 
of electronic communications, including those found on Personal Devices, in 
accordance with the requirements of the federal securities laws, including by 
ensuring that Edward Jones personnel certify in writing on a quarterly basis that 
they are complying with preservation requirements.  
 
iii.  An assessment of the surveillance program measures implemented by 
Edward Jones to ensure compliance, on an ongoing basis, with the requirements 
found in the federal securities laws to preserve electronic communications, 
including those found on Personal Devices. 
 
iv.  An assessment of the technological solutions that Edward Jones has 
begun implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Edward Jones 
personnel will use the technological solutions going forward and a review of the 
measures employed by Edward Jones to track personnel usage of new 
technological solutions.  
 

 
 
8 
v.  An assessment of the measures used by Edward Jones to prevent the 
use of unauthorized communications methods for business communications by its 
personnel.  This assessment should include, but not be limited to, a review of 
Edward Jones’s policies and procedures to ascertain if they provide for any 
significant technology and/or behavioral restrictions that help prevent the risk of 
the use of unapproved communications methods on Personal Devices (e.g., 
trading floor restrictions).   
 
vi.  A review of Edward Jones’s electronic communications surveillance 
routines to ensure that electronic communications through approved 
communications methods found on Personal Devices are incorporated into 
Edward Jones’s overall communications surveillance program.   
 
vii.  A comprehensive review of the framework adopted by Edward Jones 
to address instances of non-compliance by Edward Jones personnel with Edward 
Jones’s policies and procedures concerning the use of Personal Devices to 
communicate about Edward Jones business in the past.  This review shall include 
a survey of how Edward Jones determined which personnel failed to comply with 
Edward Jones policies and procedures, the corrective action carried out, an 
evaluation of who violated policies and why, what penalties were imposed, and 
whether penalties were handed out consistently across business lines and seniority 
levels.   
 
d.  Edward Jones shall require that, within forty-five (45) days after completion of 
the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Edward Jones and to 
the Commission staff (the “Report”).  Edward Jones shall require that the Report include 
a description of the review performed, the names of the individuals who performed the 
review, the conclusions reached, the Compliance Consultant’s recommendations for 
changes in or improvements to Edward Jones’s policies and procedures, and a summary 
of the plan for implementing the recommended changes in or improvements to Edward 
Jones’s policies and procedures. 
 
e.  Edward Jones shall adopt all recommendations contained in the Report within 
ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 
days after the date of the Report, Edward Jones shall advise the Compliance Consultant 
and the Commission staff in writing of any recommendations that Edward Jones 
considers to be unduly burdensome, impractical, or inappropriate.  With respect to any 
recommendation that Edward Jones considers unduly burdensome, impractical, or 
inappropriate, Edward Jones need not adopt such recommendation at that time, but shall 
propose in writing an alternative policy, procedure, or disclosure designed to achieve the 
same objective or purpose. 
 
f.  As to any recommendation concerning Edward Jones's policies or procedures 
on which Edward Jones and the Compliance Consultant do not agree, Edward Jones and 
the Compliance Consultant shall attempt in good faith to reach an agreement within sixty 

 
 
9 
(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 
discussion and evaluation by Edward Jones and the Compliance Consultant, Edward 
Jones shall require that the Compliance Consultant inform Edward Jones and the 
Commission staff in writing of the Compliance Consultant’s final determination 
concerning any recommendation that Edward Jones considers to be unduly burdensome, 
impractical, or inappropriate.  Edward Jones shall abide by the determinations of the 
Compliance Consultant and, within sixty (60) days after final agreement between Edward 
Jones and the Compliance Consultant or final determination by the Compliance 
Consultant, whichever occurs first, Edward Jones shall adopt and implement all of the 
recommendations that the Compliance Consultant deems appropriate. 
 
g.  Edward Jones shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Edward Jones’s files, books, 
records, and personnel as are reasonably requested by the Compliance Consultant for 
review. 
 
h. Edward Jones shall not have the authority to terminate the Compliance 
Consultant or substitute another compliance consultant for the initial Compliance 
Consultant, without the prior written approval of the Commission staff.  Edward Jones 
shall compensate the Compliance Consultant and persons engaged to assist the 
Compliance Consultant for services rendered under this Order at their reasonable and 
customary rates. 
 
i.  For the period of engagement and for a period of two (2) years from 
completion of the engagement, Edward Jones shall not (i) retain the Compliance 
Consultant for any other professional services outside of the services described in this 
Order; (ii) enter into any other professional relationship with the Compliance Consultant, 
including any employment, consultant, attorney-client, auditing or other professional 
relationship; or (iii) enter, without prior written consent of the Commission staff, into any 
such professional relationship with any of the Compliance Consultant’s present or former 
affiliates, employers, directors, officers, employees, or agents acting in their capacity as 
such. 
 
j.  The Report by the Compliance Consultant will likely include confidential 
financial, proprietary, competitive business or commercial information.  Public disclosure 
of the Report could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement.  For these 
reasons, among others, the Report and the contents thereof are intended to remain and 
shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 
in writing, (3) to the extent that the Commission determines in its sole discretion that 
disclosure would be in furtherance of the Commission’s discharge of its duties and 
responsibilities, or (4) as otherwise required by law. 
 
33. One-Year Evaluation.  Edward Jones shall require the Compliance Consultant to 
assess Edward Jones’s program for the preservation, as required under the federal securities 
laws, of electronic communications, including those found on Personal Devices, commencing 

 
 
10 
one year after submitting the Report required by Paragraph 32.d above.  Edward Jones shall 
require this review to evaluate Edward Jones’s progress in the areas described in Paragraph 
32.c.i-vii above.  After this review, Edward Jones shall require the Compliance Consultant to 
submit a report (the “One Year Report”) to Edward Jones and the Commission staff and shall 
ensure that the One Year Report includes an updated assessment of Edward Jones’s policies and 
procedures with regard to the preservation of electronic communications (including those found 
on Personal Devices), training, surveillance programs, and technological solutions implemented 
in the prior year period.  
34. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 
Edward Jones shall notify the Commission staff as follows upon the imposition of any discipline 
imposed by Edward Jones, including, but not limited to:  written warnings; loss of any pay, bonus, 
or incentive compensation; or the termination of employment or contract; with respect to any 
personnel found to have violated Edward Jones’s policies and procedures concerning the 
preservation of electronic communications, including those found on Personal Devices:  at least 
forty-eight (48) hours before the filing of a Form U-5, or within ten (10) days of the imposition of 
other discipline.   
35. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Edward Jones will have its Internal Audit function conduct a separate 
audit(s) to assess Edward Jones’s progress in the areas described in Paragraph 32.c.i-vii above.  
After completion of this audit(s), Edward Jones shall ensure that Internal Audit submits a report to 
Edward Jones and to the Commission staff. 
36. Recordkeeping.  Edward Jones shall preserve, for a period of not less than six (6) 
years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 
any record of compliance with these undertakings. 
37. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 
38. Certification.  Edward Jones shall certify, in writing, compliance with the 
undertakings set forth above.  The certification shall identify the undertakings, provide written 
evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for further 
evidence of compliance, and Respondent agrees to provide such evidence.  The certification and 
supporting material shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, 
Division of Enforcement, Securities and Exchange Commission, New York Regional Office, 100 
Pearl Street, Suite 20-100, New York, NY 10004, or such other person as the Commission staff 
may request, with a copy to the Office of Chief Counsel of the Enforcement Division, no later 
than sixty (60) days from the date of the completion of the undertakings. 

 
 
11 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act and Sections 
203(e) and 203(k) of the Advisers Act, it is hereby ORDERED that: 
 
A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 
B. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 
C. Respondent is censured.  
 
D. Respondent shall comply with the undertakings enumerated in paragraphs 31 to 
38 above. 
  
 E. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $50,000,000 to the Securities and Exchange Commission for transfer to 
the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.   
 
 Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Edward Jones as the Respondent in these proceedings, and the file number of these proceedings; 
a copy of the cover letter and check or money order must be sent to Thomas P. Smith, Jr., 

 
 
12 
Associate Regional Director, Division of Enforcement, Securities and Exchange Commission, 
New York Regional Office, 100 Pearl Street, Suite 20-100, New York, NY 10004.   
 
 F. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 
Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 
a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 
of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondent by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 100704 / August 14, 2024 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6654 / August 14, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3- 22001 

 

 

In the Matter of 

 

Edward D. Jones & Co., L.P.,  

 

Respondent. 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 21C 

OF THE SECURITIES EXCHANGE ACT OF 

1934 AND SECTIONS 203(e) AND 203(k) OF 

THE INVESTMENT ADVISERS ACT OF 

1940, MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER 

 

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 

the public interest that public administrative and cease-and-desist proceedings be, and hereby 

are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 

(“Exchange Act”) and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 

(“Advisers Act”) against Edward D. Jones & Co., L.P. (“Edward Jones” or “Respondent”). 

 

II. 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 

facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 

Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Sections 203(e) 

and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial 

Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

 



 

 

2 

III. 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that 

 

Summary 

1. The federal securities laws impose recordkeeping requirements on broker-dealers 

and registered investment advisers to ensure that they responsibly discharge their crucial role in 

our markets.  The Commission has long said that compliance with these requirements is essential 

to investor protection and the Commission’s efforts to further its mandate of protecting investors, 

maintaining fair, orderly, and efficient markets, and facilitating capital formation. 

2. These proceedings arise out of the widespread and longstanding failure of Edward 

Jones personnel throughout the firm, including at senior levels, to adhere to certain of these 

essential requirements and the firm’s own policies.  Using their personal devices, these personnel 

communicated both internally and externally by text messages and/or other unapproved written 

communications platforms (“off-channel communications”). 

3. From at least June 2019 (the “Relevant Period”), Edward Jones personnel sent 

and received off-channel communications that were records required to be maintained under 

Exchange Act Rule 17a-4(b)(4) and/or Advisers Act Rule 204-2(a)(7).  Respondent did not 

maintain or preserve the substantial majority of these written communications.  Respondent’s 

failures were firm-wide and involved personnel at various levels of authority throughout the 

organization.  As a result, Edward Jones violated Section 17(a) of the Exchange Act and Rule 

17a-4(b)(4) thereunder and Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder. 

4. Edward Jones’s widespread failure to implement a system reasonably expected to 

determine whether personnel were following its policies and procedures that prohibit off-channel 

communications led to its failure to reasonably supervise its personnel within the meaning of 

Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(6) of the Advisers Act.  

5. During the Relevant Period, Edward Jones received and responded to 

Commission subpoenas for documents and/or records requests in a number of Commission 

investigations.  As a result, Edward Jones’s recordkeeping failures likely impacted the 

Commission’s ability to carry out its regulatory functions and investigate violations of the 

federal securities laws across these investigations.   

6. Commission staff found Edward Jones’s misconduct after commencing a 

risk-based initiative to investigate the use of off-channel and unpreserved communications at 

investment advisers.  Edward Jones has initiated a review of its recordkeeping failures and begun 

a program of remediation.  As set forth in the Undertakings below, Edward Jones will retain a 

compliance consultant to review and assess Edward Jones’s remedial steps relating to its 

 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  



 

 

3 

recordkeeping practices, policies and procedures, related supervisory practices, and employment 

actions. 

Respondent 

7. Edward D. Jones & Co., L.P. is a Missouri limited partnership with its principal 

office in Saint Louis, Missouri, and has been registered with the Commission as a broker-dealer 

since 1941 and as an investment adviser since 1963.   

Recordkeeping Requirements under the Exchange and Advisers Acts 

8. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 

authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 

advisers to make and keep for prescribed periods, and furnish copies of, such records as 

necessary or appropriate in the public interest, for the protection of investors or, with respect to 

the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act. 

9. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 

under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 

time that the records created in accordance with Commission rules, and certain other records 

produced by broker-dealers or investment advisers, must be maintained and produced promptly 

to Commission representatives.   

10. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 

17a-4(b)(4), require that broker-dealers preserve in an easily accessible place originals of all 

communications received and copies of all communications sent relating to the broker-dealer’s 

business as such.  These rules impose minimum recordkeeping requirements that are based on 

standards a prudent broker-dealer should follow in the normal course of business.  

11. The Commission previously has stated that these and other recordkeeping 

requirements “are an integral part of the investor protection function of the Commission, and 

other securities regulators, in that the preserved records are the primary means of monitoring 

compliance with applicable securities laws, including antifraud provisions and financial 

responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 

Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 

with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 

12. The rules adopted under Advisers Act Section 204, including Advisers Act Rule 

204-2(a)(7), require that investment advisers preserve in an easily accessible place originals of all 

communications received and copies of all written communications sent relating to, among other 

things: (a) any recommendation made or proposed to be made and any advice given or proposed to 

be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the placing or 

execution of any order to purchase or sell any security; or (d) predecessor performance and the 

performance or rate of return of any or all managed accounts, portfolios, or securities 

recommendations. 



 

 

4 

Edward Jones’s Policies and Procedures 

13. Edward Jones maintained certain policies and procedures designed to ensure the 

retention of business-related records, including electronic communications, in compliance with 

the relevant recordkeeping provisions.  For example, since 2015, Edward Jones offered a 

proprietary on-channel texting platform for external communications between financial advisors 

or other branch office employees and clients or customers.  Despite the availability of this 

platform, during the Relevant Period, personnel sent and received business communications on 

unapproved communications platforms. 

14. Edward Jones personnel were advised that the use of unapproved electronic 

communications methods, including on their personal devices, was not permitted, and that they 

should not use personal email or unapproved chat or text messaging applications for business 

purposes.   

15. Messages sent through Edward Jones’s approved communications methods were 

monitored, subject to review, and, when appropriate, archived.  Messages sent through 

unapproved communications methods, such as unapproved applications on personal devices, 

were not monitored, subject to review, or archived. 

16. Edward Jones conducted trainings for its personnel, which were designed to address 

the firm’s supervision of its personnel and adherence to Edward Jones’s books and recordkeeping 

requirements.  The policies and related trainings notified personnel that electronic communications 

on approved platforms were subject to surveillance by Edward Jones.  Edward Jones also required 

from its personnel annual attestations of compliance with its policies and procedures regarding 

electronic communications.  

17. Edward Jones, however, failed to implement a system of follow-up and review 

reasonably expected to determine whether personnel were following its policies.  While 

permitting its personnel to use approved communications methods, including on personal 

phones, for business communications, Edward Jones failed to implement sufficient monitoring to 

ensure that its recordkeeping and communications policies were being followed.   

Edward Jones’s Recordkeeping Failures Across Its Brokerage and Investment Advisory 

Businesses 

18. In October 2022, the Commission staff commenced a risk-based initiative to 

investigate whether investment advisers were properly maintaining communications that they 

were required to preserve as records under the Advisers Act.  Edward Jones cooperated with the 

investigation by proactively gathering and reviewing communications from the personal devices 

of certain personnel and responding to the staff’s requests for additional information.  Edward 

Jones also produced, at the request of the Commission staff, off-channel communications of a 

subset of these personnel relating to Edward Jones’s investment advisory and brokerage 

businesses.  These personnel included financial advisors and team leaders, each of whom is a 

supervised person of Edward Jones in its capacity both as an investment adviser and as a broker-

dealer. 



 

 

5 

19. The Commission staff’s investigation found pervasive off-channel 

communications by Edward Jones personnel.  Nearly all Edward Jones personnel whose 

communications were reviewed in the course of the investigation had sent or received off-

channel communications that were records required to be preserved by Edward Jones under the 

Advisers Act and/or Exchange Act.  These off-channel communications were sent among 

Edward Jones colleagues as well as to and from Edward Jones clients and customers.  

20. The investigation found numerous off-channel communications that were records 

required to be preserved under the Exchange Act.  For example, an Edward Jones financial advisor 

exchanged multiple text messages on an unapproved platform with customers concerning fund 

transfers from their accounts.  As another example, an Edward Jones financial advisor and 

colleague exchanged text messages on an unapproved platform regarding executing a trade in a 

customer’s account.  

21. Off-channel communications included records required to be preserved under the 

Advisers Act because they related to an advisory recommendation made or proposed to be made 

or advice given or proposed to be given.  For example, an Edward Jones financial advisor 

exchanged text messages on an unapproved platform with a client concerning investment 

recommendations.  As another example, an Edward Jones financial advisor sent a text message on 

an unapproved platform to a client with recommendations about the client’s portfolio.   

22. Other off-channel communications were records required to be preserved under 

the Advisers Act because they related to the investment adviser’s receipt, disbursement or 

delivery of funds or securities.  For example, an Edward Jones financial advisor and colleague 

exchanged numerous text messages on an unapproved platform regarding the disbursement and 

delivery of funds to a client. 

23. The investigation found off-channel communications that were records required 

to be preserved under the Advisers Act because they related to the placing or execution of orders 

to purchase or sell securities.  For example, an Edward Jones financial advisor exchanged multiple 

text messages on an unapproved platform with clients concerning placing or executing trades in 

their accounts.    

24. In addition, the investigation also found off-channel communications that were 

records required to be preserved under the Advisers Act because they related to the performance 

or rate of return of Edward Jones client managed accounts, portfolios, or securities 

recommendations.  For example, an Edward Jones financial advisor and their client exchanged 

multiple text messages on an unapproved platform regarding portfolio performance. 

Edward Jones’s Failure to Preserve Required Records Potentially 

Compromised and Delayed Commission Matters 

25. During the Relevant Period, Edward Jones received and responded to 

Commission subpoenas for documents and/or records requests in Commission investigations.  

By failing to maintain and preserve required records relating to its businesses, Edward Jones 

likely deprived the Commission of these off-channel communications in various investigations. 



 

 

6 

Edward Jones’s Violations and Failure to Supervise 

26. As a result of the conduct described above, from at least June 2019 through the 

date of this Order, Edward Jones willfully2 violated Section 17(a) of the Exchange Act and Rule 

17a-4(b)(4) thereunder.   

27. As a result of the conduct described above, from at least June 2019 through the date 

of this Order, Edward Jones willfully violated Section 204 of the Advisers Act and Rule 

204-2(a)(7) thereunder. 

28. As a result of the conduct described above, Edward Jones failed reasonably to 

supervise its personnel, with a view to preventing or detecting certain of its supervised persons’ 

aiding and abetting violations of Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 

thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  

29. As a result of the conduct described above, Edward Jones failed reasonably to 

supervise its personnel, with a view to preventing or detecting certain of its supervised persons’ 

aiding and abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) 

thereunder, within the meaning of Section 203(e)(6) of the Advisers Act. 

Edward Jones’s Remedial Efforts 

30. In determining to accept the Offer, the Commission considered steps undertaken by 

Edward Jones prior to and after being approached by Commission staff, as well as cooperation 

afforded the Commission staff.  As noted in Paragraph 13, in 2015, prior to being contacted by 

Commission staff, Edward Jones introduced a proprietary on-channel texting platform that 

facilitated compliant communications between clients or customers who enrolled in the application 

and their financial advisors or other branch office employees.  This proprietary platform enabled 

Edward Jones to maintain and preserve a substantial number of external text messages its financial 

advisors or other branch office personnel sent or received over the approved platform.  

 

Undertakings 

31. Prior to this action, Edward Jones enhanced its policies and procedures, and 

increased training concerning the use of approved communications methods, including on 

 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and 

Section 203(e) of the Advisers Act “‘means no more than that the person charged with the duty 

knows what he is doing.’”  See Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting 

Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor 

“also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d 

Cir. 1965).  The decision in The Robare Group, Ltd. v. SEC, which construed the term 

“willfully” for purposes of a differently structured statutory provision, does not alter that 

standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing required to establish 

that a person has “willfully omit[ted]” material information from a required disclosure in 

violation of Section 207 of the Advisers Act). 



 

 

7 

personal devices, and began implementing changes to the technology available to employees.  In 

addition, Edward Jones has undertaken to: 

32. Compliance Consultant. 

a.  Edward Jones shall retain, within thirty (30) days of the entry of this Order, the 

services of a compliance consultant (“Compliance Consultant”) that is not unacceptable 

to the Commission staff.  Prior to the entry of this Order, Edward Jones retained the 

services of a consultant to address the issues in this Order.  The Compliance Consultant 

may be the same consultant previously engaged by Edward Jones.  The Compliance 

Consultant’s compensation and expenses shall be borne exclusively by Edward Jones. 

 

b.  Edward Jones will oversee the work of the Compliance Consultant. 

 

c.  Edward Jones shall provide to the Commission staff, within sixty (60) days of 

the entry of this Order, a copy of the engagement letter detailing the Compliance 

Consultant’s responsibilities, which shall include a comprehensive compliance review as 

described below.  Edward Jones shall require that, within ninety (90) days of the date of 

the engagement letter, the Compliance Consultant conduct: 

 

i.  A comprehensive review of Edward Jones’s supervisory, compliance, 

and other policies and procedures designed to ensure that Edward Jones’s 

electronic communications, including those found on personal electronic devices, 

including without limitation, cellular phones (“Personal Devices”), are preserved 

in accordance with the requirements of the federal securities laws. 

 

ii.  A comprehensive review of training conducted by Edward Jones to 

ensure personnel are complying with the requirements regarding the preservation 

of electronic communications, including those found on Personal Devices, in 

accordance with the requirements of the federal securities laws, including by 

ensuring that Edward Jones personnel certify in writing on a quarterly basis that 

they are complying with preservation requirements.  

 

iii.  An assessment of the surveillance program measures implemented by 

Edward Jones to ensure compliance, on an ongoing basis, with the requirements 

found in the federal securities laws to preserve electronic communications, 

including those found on Personal Devices. 

 

iv.  An assessment of the technological solutions that Edward Jones has 

begun implementing to meet the record retention requirements of the federal 

securities laws, including an assessment of the likelihood that Edward Jones 

personnel will use the technological solutions going forward and a review of the 

measures employed by Edward Jones to track personnel usage of new 

technological solutions.  

 



 

 

8 

v.  An assessment of the measures used by Edward Jones to prevent the 

use of unauthorized communications methods for business communications by its 

personnel.  This assessment should include, but not be limited to, a review of 

Edward Jones’s policies and procedures to ascertain if they provide for any 

significant technology and/or behavioral restrictions that help prevent the risk of 

the use of unapproved communications methods on Personal Devices (e.g., 

trading floor restrictions).   

 

vi.  A review of Edward Jones’s electronic communications surveillance 

routines to ensure that electronic communications through approved 

communications methods found on Personal Devices are incorporated into 

Edward Jones’s overall communications surveillance program.   

 

vii.  A comprehensive review of the framework adopted by Edward Jones 

to address instances of non-compliance by Edward Jones personnel with Edward 

Jones’s policies and procedures concerning the use of Personal Devices to 

communicate about Edward Jones business in the past.  This review shall include 

a survey of how Edward Jones determined which personnel failed to comply with 

Edward Jones policies and procedures, the corrective action carried out, an 

evaluation of who violated policies and why, what penalties were imposed, and 

whether penalties were handed out consistently across business lines and seniority 

levels.   

 

d.  Edward Jones shall require that, within forty-five (45) days after completion of 

the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance 

Consultant shall submit a detailed written report of its findings to Edward Jones and to 

the Commission staff (the “Report”).  Edward Jones shall require that the Report include 

a description of the review performed, the names of the individuals who performed the 

review, the conclusions reached, the Compliance Consultant’s recommendations for 

changes in or improvements to Edward Jones’s policies and procedures, and a summary 

of the plan for implementing the recommended changes in or improvements to Edward 

Jones’s policies and procedures. 

 

e.  Edward Jones shall adopt all recommendations contained in the Report within 

ninety (90) days of the date of the Report; provided, however, that within forty-five (45) 

days after the date of the Report, Edward Jones shall advise the Compliance Consultant 

and the Commission staff in writing of any recommendations that Edward Jones 

considers to be unduly burdensome, impractical, or inappropriate.  With respect to any 

recommendation that Edward Jones considers unduly burdensome, impractical, or 

inappropriate, Edward Jones need not adopt such recommendation at that time, but shall 

propose in writing an alternative policy, procedure, or disclosure designed to achieve the 

same objective or purpose. 

 

f.  As to any recommendation concerning Edward Jones's policies or procedures 

on which Edward Jones and the Compliance Consultant do not agree, Edward Jones and 

the Compliance Consultant shall attempt in good faith to reach an agreement within sixty 



 

 

9 

(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 

discussion and evaluation by Edward Jones and the Compliance Consultant, Edward 

Jones shall require that the Compliance Consultant inform Edward Jones and the 

Commission staff in writing of the Compliance Consultant’s final determination 

concerning any recommendation that Edward Jones considers to be unduly burdensome, 

impractical, or inappropriate.  Edward Jones shall abide by the determinations of the 

Compliance Consultant and, within sixty (60) days after final agreement between Edward 

Jones and the Compliance Consultant or final determination by the Compliance 

Consultant, whichever occurs first, Edward Jones shall adopt and implement all of the 

recommendations that the Compliance Consultant deems appropriate. 

 

g.  Edward Jones shall cooperate fully with the Compliance Consultant and shall 

provide the Compliance Consultant with access to such of Edward Jones’s files, books, 

records, and personnel as are reasonably requested by the Compliance Consultant for 

review. 

 

h. Edward Jones shall not have the authority to terminate the Compliance 

Consultant or substitute another compliance consultant for the initial Compliance 

Consultant, without the prior written approval of the Commission staff.  Edward Jones 

shall compensate the Compliance Consultant and persons engaged to assist the 

Compliance Consultant for services rendered under this Order at their reasonable and 

customary rates. 

 

i.  For the period of engagement and for a period of two (2) years from 

completion of the engagement, Edward Jones shall not (i) retain the Compliance 

Consultant for any other professional services outside of the services described in this 

Order; (ii) enter into any other professional relationship with the Compliance Consultant, 

including any employment, consultant, attorney-client, auditing or other professional 

relationship; or (iii) enter, without prior written consent of the Commission staff, into any 

such professional relationship with any of the Compliance Consultant’s present or former 

affiliates, employers, directors, officers, employees, or agents acting in their capacity as 

such. 

 

j.  The Report by the Compliance Consultant will likely include confidential 

financial, proprietary, competitive business or commercial information.  Public disclosure 

of the Report could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement.  For these 

reasons, among others, the Report and the contents thereof are intended to remain and 

shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 

in writing, (3) to the extent that the Commission determines in its sole discretion that 

disclosure would be in furtherance of the Commission’s discharge of its duties and 

responsibilities, or (4) as otherwise required by law. 

 

33. One-Year Evaluation.  Edward Jones shall require the Compliance Consultant to 

assess Edward Jones’s program for the preservation, as required under the federal securities 

laws, of electronic communications, including those found on Personal Devices, commencing 



 

 

10 

one year after submitting the Report required by Paragraph 32.d above.  Edward Jones shall 

require this review to evaluate Edward Jones’s progress in the areas described in Paragraph 

32.c.i-vii above.  After this review, Edward Jones shall require the Compliance Consultant to 

submit a report (the “One Year Report”) to Edward Jones and the Commission staff and shall 

ensure that the One Year Report includes an updated assessment of Edward Jones’s policies and 

procedures with regard to the preservation of electronic communications (including those found 

on Personal Devices), training, surveillance programs, and technological solutions implemented 

in the prior year period.  

34. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 

Edward Jones shall notify the Commission staff as follows upon the imposition of any discipline 

imposed by Edward Jones, including, but not limited to:  written warnings; loss of any pay, bonus, 

or incentive compensation; or the termination of employment or contract; with respect to any 

personnel found to have violated Edward Jones’s policies and procedures concerning the 

preservation of electronic communications, including those found on Personal Devices:  at least 

forty-eight (48) hours before the filing of a Form U-5, or within ten (10) days of the imposition of 

other discipline.   

35. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 

the One Year Report, Edward Jones will have its Internal Audit function conduct a separate 

audit(s) to assess Edward Jones’s progress in the areas described in Paragraph 32.c.i-vii above.  

After completion of this audit(s), Edward Jones shall ensure that Internal Audit submits a report to 

Edward Jones and to the Commission staff. 

36. Recordkeeping.  Edward Jones shall preserve, for a period of not less than six (6) 

years from the end of the fiscal year last used, the first two (2) years in an easily accessible place, 

any record of compliance with these undertakings. 

37. Deadlines.  For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 

calendar days, except that if the last day falls on a weekend or federal holiday, the next business 

day shall be considered to be the last day. 

38. Certification.  Edward Jones shall certify, in writing, compliance with the 

undertakings set forth above.  The certification shall identify the undertakings, provide written 

evidence of compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for further 

evidence of compliance, and Respondent agrees to provide such evidence.  The certification and 

supporting material shall be submitted to Thomas P. Smith, Jr., Associate Regional Director, 

Division of Enforcement, Securities and Exchange Commission, New York Regional Office, 100 

Pearl Street, Suite 20-100, New York, NY 10004, or such other person as the Commission staff 

may request, with a copy to the Office of Chief Counsel of the Enforcement Division, no later 

than sixty (60) days from the date of the completion of the undertakings. 



 

 

11 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act and Sections 

203(e) and 203(k) of the Advisers Act, it is hereby ORDERED that: 

 

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 

B. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 

C. Respondent is censured.  

 

D. Respondent shall comply with the undertakings enumerated in paragraphs 31 to 

38 above. 

  

 E. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $50,000,000 to the Securities and Exchange Commission for transfer to 

the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3).  If 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.   

 

 Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Edward Jones as the Respondent in these proceedings, and the file number of these proceedings; 

a copy of the cover letter and check or money order must be sent to Thomas P. Smith, Jr., 



 

 

12 

Associate Regional Director, Division of Enforcement, Securities and Exchange Commission, 

New York Regional Office, 100 Pearl Street, Suite 20-100, New York, NY 10004.   

 

 F. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 

of the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondent by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary