Regulator fines Merrill Lynch $500K
WASHINGTON (AP) — Merrill Lynch has been fined $500,000 by and industry monitor for failing to file, or to file in a timely manner, more than 650 required reports including customer complaints and updated information on its brokers.
The Financial Industry Regulatory Authority said Monday that the violations went undetected for several years and may have hampered investors' ability to assess the background of certain brokers through FINRA's public disclosure program. They also may have prevented firms from doing adequate background checks when making hiring decisions and kept FINRA from promptly investigating certain events, the regulator said.
Under FINRA rules, when a securities firm hires a broker, it must make sure that the information on the broker's registration application is kept current. The firm is required to update that information whenever certain events occur, including regulatory actions against the broker, customer complaints and settlements, along with felony charges and convictions.
FINRA also said that Merrill Lynch failed to adequately train and supervise personnel responsible for customer complaint tracking and reporting, and did not have systems in place to adequately track customer complaints. As a result, Merrill Lynch failed to acknowledge nearly 300 customer complaints in a timely manner, the group said.
FINRA said that as a part of the settlement, Merrill Lynch didn't admit or deny the charges, but agreed to the entry of FINRA's findings.
Merrill Lynch is a division of Bank of America Corp. In midday trading, Bank of America shares rose 4 cents to $9.15.