Merrill, Lynch, Pierce, Fenner & Smith, a Bank of America unit (BAC), will pay the state of Massachusetts $2.5 million to resolve charges that it did not abide by its own compliance rules. According to Secretary of the Commonwealth William Galvin, the firm did not properly supervise employees in January 2013 over two presentations that were made to financial advisers in Boston.
The presentations, which allegedly were not properly vetted by compliance staff, were geared toward helping advisers grow their business and oversee the services that they offer clients. Part of the presentations provided training on how to double production via the transfer of customer assets from brokerage accounts that were commission-based to ones with fiduciary fee-based options. Disclaimers about client suitability or advisers’ fiduciary duties were not provided.
According to Merrill Lynch’s own procedures and policies, its compliance team must approve these types of presentations beforehand. A Bank of America spokesperson, however, maintains that no clients were harmed. The firm has since reemphasized to its employees the importance of making sure that internal presentations are properly approved first.
Getting bilked is just one of the reasons why an investor might want to pursue a securities claim to recover losses. Broker misconduct can also include making unsuitable investments to a client, misrepresenting or omitting material facts to an investor about an investment, failure to diversify a client’s portfolio—also known as overconcentration—excessive trading in a client’s account—known as churning—failure to make orders, inadequate supervision or training of a broker, breach of contract, margin account abuse, unauthorized trading, registration violations, and other wrongdoing.
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