The Financial Industry Regulatory Authority (FINRA) announced that it has fined Merrill Lynch for failing to obtain the best price for customers involving several thousand manually executed trades. Further, the securities giant also is accused of failing to keep accurate records of those trades, among other things.
Merrill Lynch to Settle FINRA Charges
To settle the charges brought by FINRA, Merrill Lynch will pay $650,000 and a further $124,000 in restitution to customers. According to FINRA, “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.”
In other words, after FINRA reviewed Merrill Lynch’s handling of customer orders for non-convertible preferred securities, it found more than 1,500 trades in which the bank could have found a better inter-dealer market for its customers. In a similar review of over-the-counter convertible securities trades, FINRA found 551 similar problematic trades.
Notwithstanding the firm’s failure to obtain the best price, FINRA found instances in which the trades were not recorded on time, had the wrong price, and failed to disclose compensation to customers. FINRA asserted that the bank did not have the proper supervisory system in place to prevent such errors from occurring.
Merrill Lynch faces Regular FINRA Fines
This is not the first time that Merrill Lynch has found itself in FINRA’s crosshairs. In November 2016, the firm paid $6.25 million to settle allegations that it failed to ensure customers were not using funds from certain lines of credit to purchase stock on margin. Merrill also paid $2.8 million over allegations that a system glitch caused more than 20 million trades to be misreported as sales from the firm’s inventory, causing millions of inaccuracies to appear in execution reports sent to FINRA as a result.
Are You a Victim of Securities Fraud?
As we have blogged about in the past, even big banks like Merrill Lynch are not impervious to either accidental or intentional misconduct. If you believe you have been the victim of a similar kind of issue from your bank or securities firm, contact an experienced securities fraud attorney today.
Call a Securities Fraud Attorney Today
If you are looking for an attorney to review your rights and options, the securities lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerages firms for their wrongful actions.
With offices in Los Angeles, they have helped stockbroker fraud victims throughout Santa Monica, Beverly Hills, and Hollywood.