Regulators Fine Merrill and Wells Fargo Over High Commissions
Wells Fargo and Merrill Lynch will collectively pay $4.4 million to settle allegations from state securities regulators that the firms charged unreasonable commissions to retail customers following small-dollar transactions.
According to the North American Securities Administrators Association, securities regulators in Massachusetts led the investigation, along with regulators in Alabama, Iowa, Missouri, Montana, New Jersey, Texas and Washington.
The investigations found that Wells Fargo (which included Wells Fargo Clearing Services and Wells Fargo Advisors) and Merrill charged unreasonable commissions on more than 256,000 equity transactions nationwide over the past five years. According to regulators, most of the unreasonable commissions were charged by the Wells Fargo entities; retail customers were charged nearly $3.9 million between September 2020 and October 2025, while Merrill charged about $549,000 in unreasonable commissions during that same period.
According to the consent order filed by Massachusetts state regulators against Wells Fargo, the firm charged a minimum commission of $55 on certain equity transactions through May 2023, which could be up to 15% of the principal on some small-dollar equity trades.
In the order, regulators claimed the firm didn’t “reasonably supervise transactions” that included minimum equity commission charges. State securities regulators pledged that affected customers in the states participating in the settlement will be eligible for restitution, plus interest.
In a statement, NASAA President Elizabeth Bowling commended the regulators for their work in the investigation, and said that “the settlement reinforces the responsibility of financial firms to review their practices and ensure customers are treated fairly.”
Additionally, both Wells Fargo entities and Merrill Lynch will have to pay administrative fines and costs. They must also verify that they’ve changed their policies and procedures to ensure the commissions charged are “fair and reasonable,” according to NASAA.
In a statement, a Merrill spokesperson said the firm “addressed the issues raised in the settlement several years ago and is pleased to have reached a resolution with the states,” while a Wells Fargo spokesperson stated its “focus remains on serving clients, maintaining strong compliance and oversight practices, and upholding the trust our clients place in us every day.”
In June 2025, NASAA settled similar charges with Edward Jones, TD Ameritrade, LPL Financial, RBC Capital Markets and Stifel. In that case, the five firms collectively charged about $19 million to process more than 1 million small-dollar equity transactions between 2020 and 2025.
In some cases, the firms overcharged customers by applying minimum commission charges of up to $95. State securities regulators typically prohibit firms from charging unreasonable commissions, arguing that a charge exceeding 5% of the total transactions would likely be considered onerous.
Additionally, in 2023, NASAA announced a $13 million settlement with Raymond James; like the other settlements, the allegations concerned the firm charging unreasonable commissions on small-dollar transactions.
