Merrill Lynch, Pierce, Fenner & Smith Incorporated has reached a settlement with the Financial Industry Regulatory Authority (FINRA) for alleged rule violations.
From January 2018 through June 2022, in connection with brokerage transactions involving certain products eligible for advisory fee waivers, Merrill Lynch failed to establish and maintain a supervisory system and written procedures reasonably designed to ensure that its registered representatives had a reasonable basis to believe their recommendations were suitable or in each customer’s best interest.
As a result of the firm’s supervisory failures, customers holding over 2,000 accounts paid almost $1.5 million in avoidable fees.
By virtue of the foregoing, Merrill Lynch violated FINRA Rules 3110 and 2010.
In addition, for the period June 30, 2020 to June 30, 2022, Merrill Lynch also violated the Securities Exchange Act of 1934, Rule 15l- l(a)(1) by failing to comply with the Compliance Obligation of Regulation Best Interest (Reg BI).
The respondent has agreed to a censure and restitution of $1,486,380 plus interest to be paid to 1,361 unique customers.
