For most investors, the cash holdings in their portfolio may not merit much attention compared to other investments they may be monitoring. However, most investors may still reasonably expect their cash to be credited an interest rate that is tethered to the current interest rate environment. Even more, they likely don’t plan to have their cash used as a prominent profit center for their investment firms’ cash sweep practices. However, this is not what seemed to happen at several prominent financial advisory firms and institutions. Earlier this year, the SEC announced a $60 million settlement with certain investment arms of Wells Fargo and Merrill Lynch over those firms’ cash sweep practices.1 Notably, several financial investment firms and institutions have been sued for failing to apply market-rate interest rates to account holders’ cash balances with several courts recently advancing these cases into discovery.2 Last year, Moody’s issued a report noting certain investment advisory firms may have relied upon client cash sweep programs more so than others.3
At Manfred, APC, we are investigating whether certain other investment and advisory firms may have failed to pay a reasonable market-rate interest rate to their clients’ cash holdings as part of their cash sweep programs. If you have or recently had a brokerage, advisory, or retirement account with Cetera, Edward Jones, First Citizens Bank, or Kestra, your cash holdings in your account may have been underpaid interest. Don’t hesitate to reach out to us to discuss and evaluate your potential claims and rights.
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1 https://www.sec.gov/newsroom/press-releases/2025-16
2 E.g. In re LPL Financial Cash Sweep Litigation, 789 F.Supp.3d 961 (S.D. Cal., 2025); Liberty Capital Group v. Oppenheimer Holdings Inc., 2025 WL 2825402 (S.D.N.Y., 2025); Mehlman v. Ameriprise Financial, Inc., 2025 WL 2403252 (D. Minn., 2025)
3 https://www.investmentnews.com/independent-broker-dealers/large-ibds-more-likely-to-feel-cash-sweep-pain-moodys/256555
