Thursday, June 21, 2012

Merrill Lynch to pay $35 million over improper fees

Merrill Lynch was fined $2.8 million and paid $32 million in restitution after the Financial Industry Regulatory Authority found that the firm overcharged tens of thousands of customers between 2003 and 2011.

The improper fees mainly stemmed from computer coding errors, which led certain transactions to be billed at rates meant for other types of securities and trades, according to the action document from FINRA, a private company that policies brokerages and exchanges.

"Investors must be able to trust that the fees charged by their securities firm are, in fact, correct. When this is not the case, investor confidence is threatened," FINRA enforcement chief Brad Bennett said in a statement.


FINRA also found that Merrill did not provide trade confirmations for millions of transactions.

Read more here: http://obsbankwatch.blogspot.com/2012/01/finra-fines-merrill-lynch-1-million.html#storylink=cpy

Merrill Lynch does not admit or deny the claims, but has accepted the penalties.

The firm also took a $1 million penalty from FINRA in January over its handling of employee disputes over bonuses.

7 comments:

Anonymous said...

So are the keeping the fine, or are they giving it back to the customers? When can we expect to see who and how much is due?

Curious Investor.

Anonymous said...

Where does all the fine money disappear to?

Andrew Dunn said...

The $32 million is going back to customers who were overcharged. The fines go to FINRA.

Anonymous said...

How will Merrill get the money to customers who closed their accounts?

Anonymous said...

Thanks for the clarification on restitution/fine Andrew.

Do you know of any timetable or potential average amounts for reimbursement? Wonder what the communication timeline is? I am getting ready to move a good sum out of Merill and was wondering if there was any more detail availbale out there.

Thanks,

Curious Investor

Andrew Dunn said...

Curious Investor, from what FINRA says, the investors who were overcharged have already been reimbursed. From my rough math based on what was disclosed, the average investor was overcharged between $300-$1,200.

To Anonymous 3:17, the money should have already been returned. I don't know how that was done.

Anonymous said...

Notice how 'the mistakes' are always in their favor?