Regulator Sanctions Merrill Lynch for Overcharging Customers


The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch $2.8 million for overcharging nearly 95,000 customers with fees totaling more than $32 million. The overcharges occurred from April 2003 to December 2011. The fine also included failing to provide timely trade confirmations. (“Merrill Lynch Fined for Overcharging Customers,” Wall Street Journal).

“Investors must be able to trust that the fees charged by their securities firm are, in fact, correct,” Brad Bennett, the regulator’s chief of enforcement, was quoted as saying, adding: “When this is not the case, investor confidence is threatened.”

Merrill Lynch’s failure to send customers trade confirmations involved more than 10.6 million trades in over 230,000 customer accounts from July 2006 to November 2010. Merrill Lynch also failed to deliver proxy and voting materials, margin risk disclosure statements and business continuity plans.

Merrill Lynch blamed improper coding of accounts for the problems, according to the article. Merrill Lynch is a division of Bank of America.

In keeping with its much-criticized practice, FINRA allowed Merrill Lynch to buy its peace without admitting to any facts.

Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.