Thomas J. Buck, a former high-producing Merrill Lynch broker, has pleaded guilty to securities fraud and reached a settlement deal with the SEC for more than $5 million. The ex-Merrill broker, who was fired and then kicked out of the securities industry, was accused of collecting $2.5 million in excessive commissions and fees from at least 50 clients.
Buck Overcharged Clients Excessive Fees
The SEC complaint filed against Buck alleges that from 2012 through March 2015 Buck received more than $2.5 million in excessive commissions and fees from at least 50 clients. At the time, Buck’s Indiana-based practice was known as the “Buck Team” and had more than 3,000 accounts and $1.3 billion in assets under management.
Merrill Lynch told its registered representatives and advisers to compare annual commissions to annual fees and to place their clients in the less-costly accounts. Buck put clients into commission-based accounts rather than the less expensive fee-based alternatives.
He failed to tell clients when doing so, and failed to tell them that his commissions exceeded promised limits while he simultaneously executed unauthorized trades with their accounts.
During the time, most Indiana-based Merrill brokers received 70% of their revenue from clients in fee-based accounts. In contrast, 80% of Buck’s clients had commission-based accounts.
Broker Thomas J. Buck Will Pay SEC $5M
Buck has agreed to pay $2.6 million in disgorgement, a $2.2 million penalty and interest of $297,000. He was fired by Merrill Lynch in March 2015 and later that year barred from the brokerage industry by the Financial Industry Regulatory Authority Inc. (FINRA).
Buck was also the subject of an FBI probe, which resulted in one count of securities fraud. He pleaded guilty and faces up to 25 years in prison.
Have You Lost Money with Thomas J. Buck?
If you believe you have been the victim of stockbroker misconduct or other investment scheme, you may have certain legal rights that require your immediate attention.
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