Merrill Lynch recently agreed to pay a $10 million fine to settle civil securities fraud charges by regulators who accused the firm of misusing customers’ order data to make trades for its own account and for failing to disclose trading fees.
The Securities and Exchange Commission announced the settlement with Merrill Lynch, which was acquired by Bank of America in January 2009 in a $20 billion deal forged at the height of the financial crisis. Merrill Lynch neither admitted nor denied the allegations under the settlement but agreed to refrain from future violations of the securities laws.
The SEC said the violations occurred from 2002 to 2007. The agency said Merrill Lynch’s equity strategy desk obtained information on institutional customers’ orders from other traders and used it to make trades on Merrill Lynch’s behalf. That was done even though the firm had told customers their order information would be kept on a strictly need-to-know basis, the SEC said.
It also said that New York-based Merrill Lynch charged some institutional and wealthy customers undisclosed trading fees.
The sweeping financial overhaul law enacted last summer limits proprietary trading by banks, or trading on their own account for their own profit. Charlotte, N.C.-based Bank of America Corp. is cutting about a third of its proprietary trading jobs to comply with the new restrictions.
The SEC said it took into account corrective actions taken by Merrill Lynch after it was acquired by Bank of America in deciding to accept Merrill Lynch’s offer of the $10 million civil fine.
Bank of America agreed to pay $150 million in a 2009 settlement with the SEC of civil charges that it misled shareholders when it acquired Merrill Lynch. The agency had accused Bank of America of failing to disclose to shareholders before they voted on the Merrill Lynch deal that it had authorized Merrill Lynch to pay as much as $5.8 billion in bonuses to its employees in 2008 even though the firm lost $27.6 billion that year.
If you have questions about investments you made with Merrill Lynch, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions.
For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.Tags: Bank of America, Boca Raton, broker dealer, broker fraud, brokerage firm, Chicago, FINRA, Florida, Illinois, investment fraud, Merrill Lynch, Merrill Lynch investment losses, Merrill Lynch misusing information, Merrill Lynch proprietary trading, Merrill Lynch securities fraud, Merrill Lynch trade markups, NASD, New York, SEC charge, SEC investigation, securities arbitration, Securities Attorney, Securities Lawyer Last modified: December 30, 2022