Merrill Lynch Was Sanctioned Following Allegations of Failed Diligence For it’s Customers

Merrill LynchPublicly available records published by the Financial Industry Regulatory Authority (FINRA) on June 16, 2017 indicate that New York-based broker-dealer Merrill Lynch was recently sanctioned in connection to alleged rule violations. Fitapalli Kurta is interested in speaking to investors who have complaints regarding Merrill Lynch (CRD# 7691).

Founded in Delaware in 1958, Merrill Lynch is headquartered in New York, New York and registered with 53 US states and territories. Thomas Montag is Chairman of the Board and Chief Executive Officer; Joseph Guardino is Chief Operations Officer and Financial and Operations Principal; Lizbeth Applebaum is Chief Financial Officer; William Caccamise is Chief Legal Officer and General Counsel; Gloria Greco is Co-Chief Compliance Officer. The firm is registered with the Securities and Exchange Commission, FINRA and 20 other self regulatory organizations

According to the firm’s BrokerCheck report, Merrill Lynch was recently sanctioned by FINRA.

In May 2017 FINRA sanctioned the firm following allegations, among others, that “in non-convertible preferred securities (NCPS) transactions for or with a customer, the firm failed to use reasonable diligence to ascertain the best inter-dealer market and failed to buy or sell in such market so that the resultant price to its customer was as favorable as possible under prevailing market conditions.”

A letter of Acceptance, Waiver and Consent (No. 20110288421) signed by the firm states further: “During the NCPS review period, Financial Advisers (‘FA’) in the firm’s Global Wealth & Investment Management (‘GWIM’) division had two options for executing customer orders in NCPS – either route the order electronically to an exchange via the firm’s Private Client Order Entry (‘PCOE’) system, or route the order to the Credit Desk for manual execution. During the NCPS review period, the firm executed the majority of its NCPS transactions electronically and the remainder was handled manually by the Credit Desk.”

According to FINRA: “The manual execution of NCPS transactions was initiated by a GWIM FA, facilitated through one of three service desks and executed by the Credit Desk. The customer incurred an additional charge, in the form of a mark-up or mark-down of from $.04 to $.12 per share, when a NCPS transaction was manually executed by the Credit Desk (orders handled on an automated basis through PCOE did not have this mark-up or markdown). The additional charge by the Credit Desk led directly to the customer receiving an inferior price when compared to the displayed quotes on automated markets.” On one occasion, FINRA noted, “the Credit Desk sold 600 shares of a NCPS issued by J.P. Morgan Chase & Co. at $24.12 to a customer when 600 shares were offered on an automated trading center at $24.08.” The firm was censured, issued a fine of $650,000, and ordered to pay restitution to affected customers.

If you or someone you know has lost money investing with Merrill Lynch, call the experienced attorneys at Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.