Finra Cites Supervisory Lapses and Rule Violations

  • Merrill Lynch fined $1.5 million by Finra for unnecessary fees
  • Transactions executed on behalf of over 1,300 customers caused avoidable expenses
  • Allegations occurred from January 2018 to June 2022
  • Merrill offered fee waivers for advisory accounts but recommended brokerage accounts instead
  • Finra credited Merrill’s cooperation and internal review efforts

Merrill Lynch has been fined $1.5 million by the Financial Industry Regulatory Authority (Finra) for executing transactions that led to unnecessary fees for over 1,300 customers between January 2018 and June 2022. The firm allegedly offered fee waivers for advisory accounts but recommended brokerage accounts instead, causing clients to incur avoidable expenses. Finra credited Merrill’s cooperation and internal review efforts.

Factuality Level: 8
Factuality Justification: The article provides accurate information about the settlement between Merrill Lynch and Finra, details of the alleged misconduct, and the regulatory changes that contributed to the issue. It also mentions Merrill’s cooperation in addressing the problem and the rules violated. However, it could have provided more context on Regulation Best Interest and its implications for the industry.
Noise Level: 6
Noise Justification: The article provides relevant information about a financial firm’s settlement due to alleged misconduct and the regulatory changes that contributed to it. However, it lacks in-depth analysis or exploration of broader implications for the industry or lessons learned from the incident.
Public Companies: Merrill Lynch (N/A), Bank of America (N/A)
Key People:

Financial Relevance: Yes
Financial Markets Impacted: Bank of America (Merrill Lynch’s parent company)
Financial Rating Justification: The article discusses a settlement involving Merrill Lynch, a financial services firm, and the impact on their clients due to alleged supervisory lapses and unnecessary fees. This pertains to financial topics as it involves a financial institution and its practices, and impacts the parent company Bank of America.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.barrons.com