Arkansas Securities Leads $220M Multi-State Enforcement Sweep in One Day

The Arkansas Securities Department coordinated five enforcement actions in a single day totaling over $220 million against Vanguard, Block (Cash App), Edward Jones, Bayview Asset Management, and a mortgage loan officer. The sweep spans securities supervision, BSA/AML compliance, cybersecurity practices, and licensing fraud—signaling a concentrated multi-state enforcement push.

Arkansas Joins $106M Vanguard Settlement Over Tax Disclosure
The Arkansas Securities Department joined a multi-state task force and the SEC in a $106 million settlement with Vanguard Marketing Corporation and The Vanguard Group for failing to supervise registered persons and failing to disclose potential tax consequences to investors following a December 2020 change in investment minimums for certain target date retirement funds. The investigation found that Vanguard lowered investment minimums for Institutional Target Retirement Funds, causing mass redemptions from Investor TRFs that triggered significant capital gains taxes for hundreds of thousands of retail investors remaining in the Investor TRFs. The SEC will administer remediation payments to affected Arkansas investors through its Fair Fund program.

AR Fines Block Cash App $80M for BSA/AML Violations
The Arkansas Securities Department joined 47 state financial regulatory agencies in a coordinated $80 million enforcement action against Block, Inc. (Cash App) for Bank Secrecy Act (BSA) and anti-money laundering (AML) violations. State regulators found Block's services were not in compliance with customer due diligence, suspicious activity reporting, and high-risk account controls requirements, creating potential for money laundering and terrorism financing. As part of the settlement, Block must hire an independent consultant to review its BSA/AML program and correct any deficiencies within 12 months of the consultant's report.

AR Joins $17M Edward Jones Securities Settlement
The Arkansas Securities Department joined a $17 million multi-state settlement with Edward D. Jones & Co., L.P. for supervisory failures related to Class A mutual fund share commissions and fee-based investment advisory accounts. A 14-state working group led by Arkansas found gaps in Edward Jones's supervision of customers moving from brokerage to advisory accounts, particularly where customers paid front-load commissions and later moved assets sooner than anticipated. Edward Jones will pay approximately $320,000 to each of 51 jurisdictions, with Arkansas receiving an additional $15,000 for administrative and investigatory costs.

Arkansas Joins $20M Settlement Over Data Breach
The Arkansas Securities Department joined 52 state financial regulatory agencies in a $20 million settlement with Bayview Asset Management LLC and three affiliates (Lakeview Loan Servicing, Community Loan Servicing, and Pingora Holdings) for deficient cybersecurity practices and failing to comply with examination authority following a data breach impacting 5.8 million customers. This is the first collective multistate enforcement action by state regulators for a mortgage company data breach. In addition to the monetary penalty, the Bayview Companies must implement corrective actions, undergo independent assessments, and provide three years of additional reporting to states.

Mortgage Officer Barred, Fined $31k for Education Fraud
Arkansas Securities Department and 20 other state financial agencies settled with mortgage loan officer Patrick Terrance Donlon (NMLS 785311) for directing another person to complete required SAFE Act education on his behalf. Donlon is permanently barred from licensure in participating states, restricted in Colorado and Florida, and fined $31,000 total. He was also removed as Qualified Individual and Control Person of Trusted American Mortgage LLC.