Merrill Lynch Complaints, Investigations & FINRA Actions – What Investors Need to Know
If you have experienced investment losses with Merrill Lynch, you may have grounds to file a claim through FINRA arbitration. The White Law Group, a national securities fraud law firm, is actively investigating complaints involving Merrill Lynch brokers, supervisory failures, and ongoing regulatory sanctions. With nearly 1,500 total disclosures on FINRA’s BrokerCheck — including nearly 600 regulatory events — Merrill Lynch has a lengthy history of enforcement actions, customer disputes, and compliance failures that investors should understand.
New FINRA Action: Merrill Lynch Failed to Report Thousands of Customer Complaints
In a recently issued Acceptance, Waiver and Consent (AWC), FINRA found that from January 2018 through December 2023, Merrill Lynch invited customers who phoned its call centers to complete a post-call survey, which included a written commentary section. However, the firm did not reasonably review the written responses to identify customer complaints and failed to reasonably supervise to achieve compliance with its quarterly summary and statistical customer complaint reporting obligations under FINRA Rule 4530(d).
As a result, Merrill Lynch did not report thousands of customer complaints from those survey responses to FINRA. The firm was found to have violated FINRA Rules 4530(d), 3110(a) and (b), and 2010. Merrill Lynch was censured and fined $225,000.
This failure to report is significant. Rule 4530(d) exists specifically to ensure that regulators — and the investing public — have a complete picture of how firms handle customer grievances. When a firm suppresses or ignores that data, it undermines investor protection at a systemic level.
Merrill Lynch: Firm Overview and Disclosure History
Merrill Lynch, Pierce, Fenner & Smith Inc. (CRD#: 7691 / SEC#: 801-14235, 8-7221) has long been one of the most prominent broker-dealers in the United States. However, according to FINRA’s BrokerCheck, the firm carries:
– 1,477 total disclosures
– 598 regulatory events
– 874 arbitration claims
Regulatory investigations have involved products such as options, non-traded REITs, limited partnerships, variable annuities, and mutual funds.
Recent FINRA Sanctions Against Merrill Lynch
Since our last update, at least 12 new regulatory actions have been reported against Merrill Lynch. Below is a summary of the most significant recent sanctions:
Market Order Violations – February 20, 2025
Merrill Lynch was fined $275,000 for accepting equity market orders prior to secondary market trading and for failing to maintain a supervisory system under FINRA Rule 5131(D)(4). The firm was censured and required to certify remediation.
Transaction Reporting Failures – September 30, 2024
Merrill was fined $2 million for failing to accurately report execution times and short sales and for maintaining inadequate supervisory systems related to transaction reporting.
Options Reporting Deficiencies – September 23, 2024
FINRA fined Merrill Lynch $425,000 for failing to meet obligations related to options position reporting and large trader identification.
Trade Surveillance Issues – August 28, 2024
Merrill consented to a $350,000 fine for deficiencies in trade surveillance systems regarding options order handling and reporting.
Manipulative Trading Activities – August 30, 2024
Merrill Lynch and BofA Securities were jointly fined $3 million for using flawed third-party surveillance systems that failed to detect manipulative trading practices such as wash trading and prearranged trading. The firms violated FINRA Rules 3110 and 2010.
Supervisory and Recordkeeping Violations
Customer Overcharges – July 1, 2024
Merrill Lynch agreed to reimburse $1.5 million to more than 2,000 customers for fees incurred due to unsuitable product placement in brokerage accounts instead of advisory accounts.
Execution & Recordkeeping Failures – May 9, 2024
FINRA fined Merrill $825,000 for supervisory deficiencies related to equity order execution and recordkeeping. Merrill was censured and required senior management certification.
Cold Calling Violations – May 4, 2023
Merrill Lynch paid $1.4 million to FINRA and New Hampshire regulators for violations of the national Do-Not-Call registry between 2018 and 2020. This was the firm’s second telemarketing violation in New Hampshire.
Failure to Supervise Broker Churning – December 2020
Merrill Lynch paid a $26 million settlement, including $24.25 million in restitution, for failing to supervise former advisor Charles Kenahan, who engaged in churning, unauthorized trading, and the use of unsuitable leveraged products.
Mutual Fund Sales Violations
– June 1, 2022: Merrill paid $15.2 million in restitution for supervisory failures in Class C mutual fund share sales.
– June 4, 2020: Merrill paid $7.2 million in restitution for failing to apply mutual fund reinstatement rights.
– June 6, 2014: Merrill paid $32.2 million (including an $8 million fine) for overcharging retirement and charitable accounts on mutual fund sales.
Broker Misconduct and Customer Complaints
William King – Unsuitable Investments
King resigned in April 2023 following 28 customer complaints, including allegations of unauthorized options trades and misrepresentation of annuities. The White Law Group filed a FINRA claim related to his conduct.
Robert Gerstein – Unsuitable Short-Term Trading
In July 2023, Gerstein was suspended for six months, fined $5,000, and ordered to repay $129,496 for unsuitable trading of mutual funds and complex products.
Forrest Jones – Fraud Scheme
Jones was barred in 2022 following SEC allegations that he defrauded investors out of $3.7 million through a high-risk, unregistered investment scheme.
Marcus Boggs – Wire Fraud
Boggs pleaded guilty in 2021 to stealing $3 million from clients. He was barred by FINRA and the SEC after multiple customer complaints and a termination by Merrill in 2018.
Isaiah T. Williams Jr. – Barred by FINRA (April 11, 2025)
Williams was permanently barred after refusing to cooperate with FINRA’s investigation into alleged misappropriation, unsuitable strategies, and outside business activity. He voluntarily resigned in December 2024. Multiple pending disputes seek millions in damages.
Understanding FINRA Rule 3110 – Supervision Requirements
FINRA Rule 3110 requires firms like Merrill Lynch to establish a supervisory system that ensures compliance with applicable securities laws and regulations. This includes periodic inspections, review of account activity, and supervision of registered representatives — all designed to protect investors from misconduct. The repeated violations noted in this post reflect a pattern of supervisory failures that regulators have consistently cited across multiple years and departments.
Frequently Asked Questions: Merrill Lynch Complaints and Investigations
Q: What is FINRA Rule 4530(d) and why does it matter for Merrill Lynch investors?
A: FINRA Rule 4530(d) requires broker-dealers to submit quarterly statistical and summary reports of customer complaints to FINRA. Merrill Lynch’s failure to review post-call survey responses for complaints — and its subsequent failure to report thousands of those complaints — means that a significant volume of investor grievances went undetected by regulators for nearly six years. If you complained about your Merrill Lynch account between 2018 and 2023, your complaint may have been among those never reported. This does not eliminate your right to pursue a claim — contact us to discuss your options.
Q: Can I recover investment losses from Merrill Lynch?
A: Possibly. If your losses resulted from unsuitable investment recommendations, unauthorized trades, churning, misrepresentation, or other forms of broker misconduct, you may be eligible to file a FINRA arbitration claim. Many investors have successfully recovered losses through this process, which is separate from any regulatory enforcement action.
Q: How many regulatory actions has Merrill Lynch faced?
A: According to FINRA’s BrokerCheck, Merrill Lynch has 1,477 total disclosures, including 598 regulatory events and over 870 arbitration claims. In recent years alone, the firm has been sanctioned for issues ranging from trade surveillance failures and options reporting deficiencies to cold calling violations and unreported customer complaints.
Contact The White Law Group
The White Law Group is a national securities fraud law firm representing investors in FINRA arbitration claims involving stock fraud, churning, unsuitable investments, unauthorized trading, unreported complaints, and other forms of broker misconduct.
If you invested with Merrill Lynch and have concerns about how your account was handled, our attorneys are here to help. We represent clients nationwide.
Call us today at (888) 637-5510 or visit our Contact Us page to speak with a securities fraud attorney.
