SEC hits SunTrust for charging avoidable fees to investment clients

SunTrust Banks agreed to pay more than $1.1 million to settle U.S. charges that its investment subsidiary had improperly collected avoidable mutual fund fees from clients in Florida and other states, according to the U.S. Securities and Exchange Commission.

In a statement, the SEC said it had charged Atlanta-based SunTrust Investment Services for "improperly recommending more expensive share classes of various mutual funds when cheaper shares of the same funds were available." SunTrust separately began refunding the overcharged fees plus interest to affected clients after the SEC started its investigation.

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SEC examiners cited the practice during a compliance review of the firm in mid-2015. More than 4,500 SunTrust accounts were affected in more than 40 states, including 1,400 accounts in Florida. Some accounts had avoidable fees topping $2,000, the SEC found.

SunTrust is the third largest bank in Florida, based on deposits, after Bank of America and Wells Fargo.