Tag: Merrill Lynch

Broker Thomas J. Buck Pleads Guilty to Securities Fraud

Broker Thomas J. Buck Pleads Guilty to Securities Fraud

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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.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los Angeles, New York, West Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or free consultation to review your rights and options.

FINRA Fines Merrill Lynch Over Customer Prices

FINRA Fines Merrill Lynch Over Customer Prices

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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.

Merrill Lynch Broker Fined by FINRA

Merrill Lynch Broker Guilty of Stealing $1 Million from Clients

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Merrill Lynch Broker Illegally Moves Money

A former Merrill Lynch broker pled guilty to stealing more than $1 million dollars from two of his clients by illegally withdrawing funds without permission.

Former Merrill Lynch adviser Alec Rivera pled guilty to committing wire fraud between October 2010 and September 2013, when he was a Merrill Lynch employee in Chicago.

Merrill Lynch Broker Alec Rivera Caught 

Rivera illegally withdrew funds from client accounts and then passed them through a Chicago-based chamber of commerce, before moving the money to his own account.

Rivera convinced colleagues at his brokerage firm to make over 100 cash transfers by telling them he had the authorization to do so. He then issued checks from the chamber of commerce to himself, claiming he had to make payments for various obligations, such as “IRS attorney payment.”

To hide his fraud, he had the clients’ real statements mailed to his address and created fake account statements that he provided to the two clients.

FINRA barred Rivera from acting as a securities broker in 2014 after his theft came to light and he failed to provide information related to the stolen funds.

Although he faces a possible 20-year prison sentence, he likely will receive between 3 ½ and 4 years under federal sentencing guidelines for cooperating.

Did You Invest with former Merrill Lynch Broker Alec Rivera? 

Whether you invested with Alec Rivera or someone like him, you may have certain rights that require your immediate attention.

Call a Stockbroker 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.

Puerto Rican securities and Puerto Rico play a part in Merrill Lynch case.

Merrill Lynch Pays Fine Over Puerto Rican Securities

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The Financial Industry Regulatory Authority (FINRA) announced that Merrill Lynch will pay more than $7 million in fines for inadequately supervising its customers’ use of leverage. The settlement includes Merrill Lynch repaying some customers for losses on Puerto Rican securities in leveraged accounts.

Merrill Lynch Pierce Fenner & Smith Inc. will pay a $6.25 million fine to settle FINRA allegations that the brokerage firm failed to ensure customers were not using funds from certain credit lines to buy securities. The firm will pay an additional $780,000 in restitution to 22 customers of its Puerto Rican branch after FINRA found it failed to supervise the suitability of their transactions, leading to losses after the customers’ funds became highly concentrated in risky Puerto Rican securities.

According to FINRA, from January 2014 through November 2014, Merrill Lynch failed to maintain adequate supervisory systems to ensure compliance with applicable law when operating a securities-based lending program called loan management accounts (LMAs).

Under that program, customers could open an LMA to borrow money from Merrill’s banking affiliate, Bank of America, using securities in their Merrill Lynch accounts as collateral. During the time in question, customers opened 121,000 LMAs and received more than $85 billion in total credit.

FINRA charged Merrill Lynch with failing to train its representatives on the different types of accounts – namely whether loan proceeds could be used to buy securities.  Merrill also was sanctioned for over-concentrating Puerto Rico customer accounts in risky securities purchased with LMAs. As a result, approximately 25 customers with modest net worth and investment objectives suffered heavy losses after investing more than 75% of their account assets in the securities despite the risks.

Call a Los Angeles Securities Fraud Attorney Today

Investing can be quite complicated, and even brokers and brokerage firms can make serious mistakes. If you invested with Merrill Lynch or in risky Puerto Rico securities, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.

Finance sheets and coins related to Mutual Funds in IRAs

Merrill Lynch Halts Sales of Mutual Funds in IRAs

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With new Department of Labor fiduciary rules set to take effect next April, at least one brokerage giant is telling its advisers to watch out: Merrill Lynch has informed its brokers to stop sales of mutual funds in brokerage-based individual retirement accounts immediately – well in advance of the impending rule change.

According to Frank McDonnell, head of Merrill Lynch’s Global Mutual Funds, mutual funds may still be purchased in investment advisory program accounts and non-retirement brokerage accounts. By changing its internal guidelines in advance of the fiduciary rule change, the brokerage firm apparently is hoping to avoid any potential conflicts of interest that might arise between now and next April when the new Department of Labor rule takes effect.

The new Department of Labor fiduciary rule will require brokers to put their clients’ interests first for retirement accounts, which places a higher burden on brokers than currently exists. Merrill Lynch has become one of the first brokerage firms to make their compliance strategy public, stating that they would no longer be offering commission-based IRAs in 2017.

Investors who purchase mutual funds between now and next April for their retirement accounts would be charged commissions on the purchases, and then an additional fee for enrolling in the firm’s investment advisory program. Merrill Lynch has decided to do this to preemptively guard against any future issues and eliminate potential conflicts.

Are you invested in Mutual Funds in IRAs with Merrill Lynch? 

The SEC, DOL, FINRA and many other governing bodies dealing with securities are constantly implementing new rules. It is incumbent upon your broker and brokerage firm to be aware of these new rules.

If you lost money in your brokerage account and you suspect your broker or brokerage firm may have misled you or recommended unsuitable investments, you may have certain legal rights that require your immediate attention.

Contact an experienced Los Angeles securities fraud attorney today to discuss your rights and options.