Asset Management

Legal challenges to brokers’ cash practices mount. New suits target UBS, LPL and Ameriprise

The latest wave of lawsuits targeting the low interest rates brokerages offer in their cash-sweep accounts builds on ongoing litigation and regulatory scrutiny

Low yields paid out on cash held in clients’ sweep accounts have triggered multiple lawsuits across the industry.
Low yields paid out on cash held in clients’ sweep accounts have triggered multiple lawsuits across the industry. Photo: Barron’s Staff Illustration/Dreamstime

Lawsuits targeting wealth management firms’ interest payments on clients’ uninvested cash continue to pile up, with Ameriprise Financial, LPL Financial, and UBS the latest targets.

Two new lawsuits filed last week against Ameriprise are seeking class-action status, damages, and injunctive relief, contending that the broker has an ongoing obligation to act in its clients’ best interests, but that it failed to do so by keeping clients’ cash in low-interest sweep accounts even as the Fed embarked on its rate-hiking campaign.

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