The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch, Pierce, Fenner & Smith, Inc. $2.8 million for supervisory failures that resulted in overcharging customers $32 million in unwarranted fees. Merrill Lynch has paid $32 million in remediation, plus interest, to the affected customers. FINRA enforcement chief Brad Bennett had this to say:
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.
According to FINRA officials, Merrill Lynch failed to have an adequate supervisory system to ensure that customers in certain investment advisory programs were billed in accordance with contract and disclosure documents. As a result, the firm overcharged nearly 95,000 customer accounts fees of more than $32 million. Merrill Lynch has since returned the unwarranted fees, with interest, to the affected customers. Merrill Lynch also failed to provide timely trade confirmations to customers in certain advisory programs due in what was described as “computer programming errors.” As a result, from July 2006 to November 2010, Merrill Lynch failed to send customers trade confirmations for more than 10.6 million trades in over 230,000 customer accounts. All of this is inexcusable and Merrill Lynch is now paying for it.
Source: Corporate Crime Reporter
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