Articles Tagged with Merrill Lynch

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Jarred M. Lawson, of Jacksonville, Florida, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for allegedly making negligent misrepresentations with respect to the sale of Class A and C mutual funds.

FINRA alleged that while registered with Merrill Lynch, Pierce, Fenner & Smith (Merrill Lynch), Mr. Lawson made negligent misrepresentations or omissions regarding the sale of Class A and C mutual funds during phone calls with numerous customers.  According to FINRA, Mr. Lawson failed to discuss the share classes and the fees associated with them.  Further, Mr. Lawson allegedly misrepresented the fees associated with a managed account.  Continue reading →

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Landon L. Williams, a former Daytona Beach, Florida-based registered representative with Merrill Lynch, Pierce, Fenner & Smith, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he made false and/or misleading statements to customers regarding the securities transactions he was recommending.

According to the FINRA complaint, Mr. Williams ­­­­­­­­­participated in phone conversations with five different customers and allegedly made misleading and/or false statements and/or failed to disclose material information about securities recommendations.  While employed as a Financial Solutions Advisor in the firm’s Merrill Edge Advisory Center (Merrill Edge), Mr. Williams, working in a Merrill Edge call center, allegedly recommended that a customer sell her positions in the Blackrock Core Bond Fund Class C and invest in the Blackrock Funds Diversified Portfolios IV (Growth) Class A.  Mr. Williams allegedly told his client that by switching to the “A” share, she would realize a 2% increase in her annual rate of return.  This statement was alleged by FINRA to be false and misleading.  Continue reading →

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John Joseph Arnold, a broker formerly employed by Newport Beach, California-based Merrill Lynch, Pierce, Fenner & Smith, Inc., submitted an Offer of Settlement in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he falsely represented that he had verbally confirmed wire requests which turned out to be fraudulent requests from a customer’s hacked email account.

John Arnold, of San Clemente, California, falsely represented to a sales assistant and his member firm that two wire requests were verbally confirmed with the customer, when in fact, he had not spoken with the customer.  Further, and in contravention of his firm’s rules, Mr. Arnold split the wire into two separate transfers over two consecutive days to avoid obtaining a Letter of Authorization from the customer, which was required for wire requests exceeding $50,000.  Continue reading →

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Scott Muirhead of Jacksonville, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to provide documents and information as requested by FINRA staff. Mr. Muirhead first became associated with a FINRA member firm in April 2006. Mr. Muirhead was registered with four other FINRA member firms as a GSR before joining Merrill Lynch, Pierce, Fenner & Smith, Inc. in March 2014.

During the course of an investigation into allegations that Mr. Muirhead engaged in unapproved private securities transactions and misused customer funds, FINRA requested that Mr. Muirhead provide documents and information, in correspondence with FINRA Rule 8210, by February 12, 2016. Mr. Muirhead acknowledged that he received FINRA’s request and that he would not provide the requested documents and information at any time.

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Thomas Joseph Buck, a former registered representative with the Carmel, Indiana branch of Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he made unsuitable account recommendations and exercised discretion in clients’ accounts.

Thomas Buck, of Carmel, Indiana, allegedly conducted business under the designation “The Buck Group” with more than 3,000 accounts and $1.3 billion under management. According to FINRA, Mr. Buck neglected to adequately assess the suitability of the fee structure for certain clients – using commission-based accounts when it would have been less expensive for the clients to maintain fee-based accounts. FINRA found that in some instances, Mr. Buck’s clients paid substantially more in commissions than they would have if they were in fee-based accounts. Further, Mr. Buck allegedly misled clients about the potential advantages of fee-based accounts so that the clients remained in the higher-cost commission-based accounts. Mr. Buck also made unauthorized trades in certain customer accounts, allegedly neglecting to get the customers or Merrill Lynch’s prior written authorization as required by FINRA Rule 2010. Consequently, Mr. Buck was permanently barred from association with any FINRA member in any capacity. Continue reading →

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Former Merrill Lynch and Raymond James stock broker, Sunil Sharma, plead guilty to wire fraud charges in Federal court last week. According to the U.S. Attorney Office (“USAO”), Mr. Sharma admitted that he stole $6 million from investors by misrepresenting that he was making conservative investments when he actually was pursuing a risky day trading strategy. Apparently, Mr. Sharma was not a successful day trader and eventually his so called conservative investment venture turned into a massive Ponzi scheme.

A “Ponzi scheme,” is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors to pay an earlier investor’s returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. Continue reading →

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Tammy C. Petersen, a former Merrill Lynch, Pierce, Fenner and Smith Inc. (Merrill Lynch) representative, submitted an Acceptance Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) to settle the alleged Rule violations, without admitting or denying the allegations made against her for improper use of a customer’s funds. Pursuant to the settlement, Ms. Petersen was permanently banned from associating with any FINRA firm.

In March 2000, Tammy C. Petersen first entered the securities industry with a National Association of Securities Dealers (NASD) member firm. In July 2000, Ms. Petersen became an investment company/ variable contracts products limited representative with American Funds Distributers until May 2003. Thereafter, she became registered with Wells Fargo Advisors. In October 2010, Ms. Petersen became registered with Merrill Lynch. Continue reading →

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The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch $6 million for Regulation SHO (Reg SHO) violations and failures to supervise. According to FINRA’s announcement on October 27, 2014, it censured and fined Merrill Lynch Professional Clearing Corp. (Merrill Lynch PRO) $3.5 million for violating Reg SHO, which is an SEC rule governing short sales and aimed at preventing abusive naked short selling. Additionally, FINRA also censured and fined Merrill Lynch, Pierce, Fenner & Smith Inc. (Merrill Lynch) $2.5 million for inadequate supervisory practices.

According to FINRA, from September 2008 through July 2012, Merrill Lynch PRO failed to take action to close out certain fail-to-deliver positions, as required under Reg SHO. Further, Merrill Lynch PRO did not have appropriate systems and procedures in place to address the Reg SHO close-out requirements during most of the time period. Continue reading →