SAINT PAUL, MN:  The Minnesota Department of Commerce joined federal and state financial regulatory agencies across the U.S. to take coordinated enforcement actions involving financial consumer protection laws that have resulted in three settlements totaling over $203 million. 

“Through collaboration with state and federal regulators, we have been able to protect consumers who rely on financial services companies to manage their money,” said Commerce Commissioner Grace Arnold. “The settlements show the value of state financial services regulators in making a larger impact on outcomes for consumers.” 

Commerce Assistant Commissioner of Enforcement Jacqueline Olson said, “These enforcement actions help to ensure consumers receive services they expect, whether it’s managing their money, ensuring safe and sound transfer of their money through convenient services such as Cash App, or protecting consumers who were hit with surprise big tax bills from their retirement investments with Vanguard. Consumers have important protections through our laws and these actions show our commitment to protecting consumers and coordinating with other states.” 

These settlements involve the Minnesota Department of Commerce in partnerships with the Conference of State Bank Supervisors (CSBS), the North American Securities Administrators Association (NASAA), and the U.S. Securities and Exchange Commission:  

Settlement for $80 million with Block, Inc., Cash App: Coordinated action by 48 state agencies against Block, Inc., for violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illegal use. More than 50 million consumers in the U.S. use Block’s mobile payment service, Cash App, to spend, send, store, and invest money. In the multistate settlement through CSBS, Block agreed to pay an $80 million penalty to the state agencies, hire an independent consultant to review its BSA/AML program to ensure the program is comprehensive and effective, and submit a report to the participating states within 9 months. Block will then have 12 months to correct any deficiencies found by the participating states after review of Block’s report. Minnesota will receive about $1.65 million from this settlement.

Through a strong, nationwide regulatory framework, state financial regulators license and serve as the primary supervisor of money transmitters. Minnesota licenses more than 400 money transmitters, through the state-developed Money Transmission Modernization Act (MTMA), which Minnesota adopted in 2023. To protect consumers and enforce safety and soundness requirements, state regulators regularly coordinate supervision of multistate firms and, when necessary, initiate enforcement actions. This coordination – Networked Supervision – supports consistency and collaboration, while preserving the authority of individual states to take direct action. Additional information on the state regulatory framework for money transmission can be found here.

Settlement for $17 million with Edward Jones:  A multistate enforcement settlement for $17 million with Edward D. Jones & Co, L.P. Edward Jones offers brokerage services, including buying and selling stocks, as well as financial advising services, including helping consumer investors plan for retirement. The settlement is the result of a multistate 4-year investigation through NASAA, which found Edward Jones charged front-load commissions on Class A mutual fund shares when customers sold or moved the shares sooner than expected. It also examined Edward Jones’ oversight of customers switching from brokerage to advisory accounts in light of the U.S. Department of Labor 2016 Fiduciary Rule, which requires a fiduciary standard for investment advice to retirement accounts. As part of the settlement, Edward Jones will pay an administrative fine of about $320,000 to Minnesota.

Settlement for $106 million with Vanguard: Commerce joined a taskforce of state securities regulators and the SEC in a $106 million settlement with Vanguard Marketing Corporation and The Vanguard Group, Inc. The settlement stems from a 3-year multistate task force investigation, coordinated through NASAA’s Enforcement Section Committee, to conduct a comprehensive investigation parallel to a concurrent investigation by the SEC. The investigation revealed that, in 2020, Vanguard lowered the investment minimums for its Institutional Target Retirement Funds (TRFs). As a result of the lowered investment minimum, a large number of retirement plan investors redeemed their investor TRF shares to purchase institutional TRF shares. The large number of redemptions caused Vanguard to sell highly appreciated assets in the Investor TRF, which triggered significant capital gains taxes for hundreds of thousands of retail investors who remained invested in the Investor TRF. Vanguard did not disclose the potential capital gains and tax implications to Investor TRF shareholders, which was a consequence of the migration of shareholders from the Investor TRF to the Institutional TRF.  Through this settlement, at least 4,000 Minnesota consumers or more may receive restitution from this settlement.

The Minnesota Department of Commerce is here to help: The Minnesota Department of Commerce works to assist and protection consumers, and to ensure a strong, fair marketplace. Minnesota consumers and businesses can contact Commerce’s Enforcement Division about concerns or complaints: 

• File a complaint online 
• Email: consumer.protection@state.mn.us  
• Verify whether a financial services agent or company is licensed to do business in Minnesota: License Lookup.
• Search Commerce Actions and Regulatory Documents to view past enforcement actions.

Connect with the Minnesota Commerce Department
Get updates and news from the Minnesota Department of Commerce by following Commerce at mn.gov/commerce or @MNCommerce on social media.

Contact
Mo Schriner
Minnesota Department of Commerce
651-363-1227
mo.schriner@state.mn.us