If you hold or held cash balances or deposits in an investment account with a cash sweep feature and it allegedly did not optimize your returns, you may be eligible to take part in a class action lawsuit investigation. Fill out the form to receive a free case review.
Banks and investment adviser firms are entrusted to serve clients with the utmost integrity. However, some financial institutions are currently facing allegations related to the management of uninvested cash balances in customers’ investment accounts . These claims specify that certain financial organizations are working with affiliated banks that are failing to maximize returns for investors.
Multiple financial organizations are currently under review regarding the practices surrounding cash sweep accounts. Those that are facing ongoing inquiries include:
- Adviser Group
- Avantax Investment Services Inc.
- AXA Advisors, LLC
- Bank of America
- Barney LLC
- Cambridge Investment Research
- E*Trade
- Edward Jones
- Equitable Advisers, LLC
- Fidelity Investments
- J.P. Morgan
- Lincoln Financial Group
- MassMutual
- Merrill Lynch
- Morgan Stanley Smith
- National Financial Services, LLC
- Osaic
- PNC
- Raymond James
- RBC
- Royal Alliance
- Securities America
- Stifel
- UBS
- Wells Fargo Advisers
If you or a loved one have invested with one or more of these organizations, you may be eligible to take part in a class action lawsuit.
Do you qualify?
Are you dissatisfied with the returns generated by your investment adviser account? Your bank or brokerage firm may not be handling the account with your best interest in mind. Fill out the form to learn more.
What is a cash sweep account?
A cash sweep account is designed to optimize interest for the account holder with very little time commitment and effort. This type of account automatically transfers uninvested cash balances in customers’ investment accounts into interest-bearing each business day. The transfer includes any funds exceeding a predetermined threshold.
For example, an account holder may set the threshold at $10,000. If the account balance is $10,500 at the end of the day, the excess $500 is swept into an investment vehicle, typically a Money Market account.
With a sweep account, idle funds are not left stagnant but instead are invested whenever possible to maximize returns.
Sweep accounts may pay low interest rates
While cash sweep programs are designed to automatically transfer funds to higher-yielding investment vehicles, certain banking institutions may not always operate in the best interest of the customers.
The U.S. is currently in a period marked by relatively high interest rates. However, specific banks and investment adviser firms have been artificially deflating rates on sweep deposits. Rather than transferring funds to an account that offers competitive returns, these financial organizations transfer the funds to either affiliated or unaffiliated banks that are providing a fraction of the interest.
As a result, account holders do not receive the potential returns that are available in the current environment. All the while, these financial institutions reaped massive profits on the cash due to rising interest rates.
